Correlation Between NP3 Fastigheter and Catena AB
Can any of the company-specific risk be diversified away by investing in both NP3 Fastigheter and Catena AB 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 Catena AB 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 Catena AB, you can compare the effects of market volatilities on NP3 Fastigheter and Catena AB 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 Catena AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NP3 Fastigheter and Catena AB.
Diversification Opportunities for NP3 Fastigheter and Catena AB
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NP3 and Catena is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NP3 Fastigheter AB and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena 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 Catena AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena AB has no effect on the direction of NP3 Fastigheter i.e., NP3 Fastigheter and Catena AB go up and down completely randomly.
Pair Corralation between NP3 Fastigheter and Catena AB
Assuming the 90 days trading horizon NP3 Fastigheter AB is expected to generate 1.28 times more return on investment than Catena AB. However, NP3 Fastigheter is 1.28 times more volatile than Catena AB. It trades about 0.04 of its potential returns per unit of risk. Catena AB is currently generating about 0.04 per unit of risk. If you would invest 18,621 in NP3 Fastigheter AB on September 12, 2024 and sell it today you would earn a total of 6,379 from holding NP3 Fastigheter AB or generate 34.26% 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. Catena AB
Performance |
| Timeline |
| NP3 Fastigheter AB |
| Catena AB |
NP3 Fastigheter and Catena AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NP3 Fastigheter and Catena AB
The main advantage of trading using opposite NP3 Fastigheter and Catena AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NP3 Fastigheter position performs unexpectedly, Catena AB 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 Catena AB will offset losses from the drop in Catena AB's long position.| NP3 Fastigheter vs. Platzer Fastigheter Holding | NP3 Fastigheter vs. Catena AB | NP3 Fastigheter vs. AB Sagax | NP3 Fastigheter vs. Nyfosa AB |
| Catena AB vs. Platzer Fastigheter Holding | Catena AB vs. AB Sagax | Catena AB vs. Nyfosa AB | Catena AB vs. Dios Fastigheter 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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