Correlation Between Nyfosa AB and FastPartner
Can any of the company-specific risk be diversified away by investing in both Nyfosa AB and FastPartner 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 Nyfosa AB and FastPartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nyfosa AB and FastPartner AB, you can compare the effects of market volatilities on Nyfosa AB and FastPartner 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 Nyfosa AB with a short position of FastPartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nyfosa AB and FastPartner.
Diversification Opportunities for Nyfosa AB and FastPartner
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nyfosa and FastPartner is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Nyfosa AB and FastPartner AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FastPartner AB and Nyfosa AB 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 Nyfosa AB are associated (or correlated) with FastPartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FastPartner AB has no effect on the direction of Nyfosa AB i.e., Nyfosa AB and FastPartner go up and down completely randomly.
Pair Corralation between Nyfosa AB and FastPartner
Assuming the 90 days trading horizon Nyfosa AB is expected to generate 0.95 times more return on investment than FastPartner. However, Nyfosa AB is 1.05 times less risky than FastPartner. It trades about 0.07 of its potential returns per unit of risk. FastPartner AB is currently generating about 0.05 per unit of risk. If you would invest 6,218 in Nyfosa AB on August 31, 2024 and sell it today you would earn a total of 4,682 from holding Nyfosa AB or generate 75.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nyfosa AB vs. FastPartner AB
Performance |
| Timeline |
| Nyfosa AB |
| FastPartner AB |
Nyfosa AB and FastPartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nyfosa AB and FastPartner
The main advantage of trading using opposite Nyfosa AB and FastPartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nyfosa AB position performs unexpectedly, FastPartner 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 FastPartner will offset losses from the drop in FastPartner's long position.| Nyfosa AB vs. AstraZeneca PLC | Nyfosa AB vs. Investor AB ser | Nyfosa AB vs. Investor AB ser | Nyfosa AB vs. Atlas Copco AB |
| FastPartner vs. Samhaellsbyggnadsbolaget i Norden | FastPartner vs. AB Sagax | FastPartner vs. Atrium Ljungberg AB | FastPartner vs. Nyfosa 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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