Correlation Between Online Brands and Fastighetsbolaget
Can any of the company-specific risk be diversified away by investing in both Online Brands and Fastighetsbolaget 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 Online Brands and Fastighetsbolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Online Brands Nordic and Fastighetsbolaget Emilshus AB, you can compare the effects of market volatilities on Online Brands and Fastighetsbolaget 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 Online Brands with a short position of Fastighetsbolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Online Brands and Fastighetsbolaget.
Diversification Opportunities for Online Brands and Fastighetsbolaget
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Online and Fastighetsbolaget is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and Fastighetsbolaget Emilshus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastighetsbolaget and Online Brands 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 Online Brands Nordic are associated (or correlated) with Fastighetsbolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastighetsbolaget has no effect on the direction of Online Brands i.e., Online Brands and Fastighetsbolaget go up and down completely randomly.
Pair Corralation between Online Brands and Fastighetsbolaget
Assuming the 90 days trading horizon Online Brands is expected to generate 89.5 times less return on investment than Fastighetsbolaget. In addition to that, Online Brands is 1.3 times more volatile than Fastighetsbolaget Emilshus AB. It trades about 0.0 of its total potential returns per unit of risk. Fastighetsbolaget Emilshus AB is currently generating about 0.2 per unit of volatility. If you would invest 4,430 in Fastighetsbolaget Emilshus AB on September 3, 2024 and sell it today you would earn a total of 460.00 from holding Fastighetsbolaget Emilshus AB or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Online Brands Nordic vs. Fastighetsbolaget Emilshus AB
Performance |
| Timeline |
| Online Brands Nordic |
| Fastighetsbolaget |
Online Brands and Fastighetsbolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Online Brands and Fastighetsbolaget
The main advantage of trading using opposite Online Brands and Fastighetsbolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Online Brands position performs unexpectedly, Fastighetsbolaget 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 Fastighetsbolaget will offset losses from the drop in Fastighetsbolaget's long position.| Online Brands vs. NetJobs Group AB | Online Brands vs. Mantex AB | Online Brands vs. Doxa AB | Online Brands vs. Clean Motion AB |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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