Correlation Between NP3 Fastigheter and NCAB
Can any of the company-specific risk be diversified away by investing in both NP3 Fastigheter and NCAB 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 NCAB 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 NCAB Group, you can compare the effects of market volatilities on NP3 Fastigheter and NCAB 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 NCAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NP3 Fastigheter and NCAB.
Diversification Opportunities for NP3 Fastigheter and NCAB
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NP3 and NCAB is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NP3 Fastigheter AB and NCAB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCAB Group 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 NCAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCAB Group has no effect on the direction of NP3 Fastigheter i.e., NP3 Fastigheter and NCAB go up and down completely randomly.
Pair Corralation between NP3 Fastigheter and NCAB
Assuming the 90 days trading horizon NP3 Fastigheter AB is expected to generate 1.01 times more return on investment than NCAB. However, NP3 Fastigheter is 1.01 times more volatile than NCAB Group. It trades about -0.06 of its potential returns per unit of risk. NCAB Group is currently generating about -0.25 per unit of risk. If you would invest 25,799 in NP3 Fastigheter AB on August 28, 2024 and sell it today you would lose (749.00) from holding NP3 Fastigheter AB or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NP3 Fastigheter AB vs. NCAB Group
Performance |
| Timeline |
| NP3 Fastigheter AB |
| NCAB Group |
NP3 Fastigheter and NCAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NP3 Fastigheter and NCAB
The main advantage of trading using opposite NP3 Fastigheter and NCAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NP3 Fastigheter position performs unexpectedly, NCAB 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 NCAB will offset losses from the drop in NCAB's long position.| NP3 Fastigheter vs. Platzer Fastigheter Holding | NP3 Fastigheter vs. Catena AB | NP3 Fastigheter vs. AB Sagax | NP3 Fastigheter vs. Nyfosa AB |
| NCAB vs. MIPS AB | NCAB vs. Hexatronic Group AB | NCAB vs. Lagercrantz Group AB | NCAB vs. Vitec Software Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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