Correlation Between NP3 Fastigheter and Castellum
Can any of the company-specific risk be diversified away by investing in both NP3 Fastigheter and Castellum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NP3 Fastigheter and Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NP3 Fastigheter AB and Castellum AB, you can compare the effects of market volatilities on NP3 Fastigheter and Castellum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NP3 Fastigheter with a short position of Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of NP3 Fastigheter and Castellum.
Diversification Opportunities for NP3 Fastigheter and Castellum
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NP3 and Castellum is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NP3 Fastigheter AB and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB and NP3 Fastigheter is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NP3 Fastigheter AB are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of NP3 Fastigheter i.e., NP3 Fastigheter and Castellum go up and down completely randomly.
Pair Corralation between NP3 Fastigheter and Castellum
Assuming the 90 days trading horizon NP3 Fastigheter AB is expected to generate 1.41 times more return on investment than Castellum. However, NP3 Fastigheter is 1.41 times more volatile than Castellum AB. It trades about 0.03 of its potential returns per unit of risk. Castellum AB is currently generating about -0.04 per unit of risk. If you would invest 25,500 in NP3 Fastigheter AB on September 2, 2024 and sell it today you would earn a total of 250.00 from holding NP3 Fastigheter AB or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NP3 Fastigheter AB vs. Castellum AB
Performance |
| Timeline |
| NP3 Fastigheter AB |
| Castellum AB |
NP3 Fastigheter and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NP3 Fastigheter and Castellum
The main advantage of trading using opposite NP3 Fastigheter and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NP3 Fastigheter position performs unexpectedly, Castellum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Castellum will offset losses from the drop in Castellum's long position.| NP3 Fastigheter vs. Fastighets AB Balder | NP3 Fastigheter vs. Wallenstam AB | NP3 Fastigheter vs. Hufvudstaden AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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