Correlation Between OMX Stockholm and Heimstaden
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By analyzing existing cross correlation between OMX Stockholm Mid and Heimstaden AB Pfd, you can compare the effects of market volatilities on OMX Stockholm and Heimstaden 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 OMX Stockholm with a short position of Heimstaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Heimstaden.
Diversification Opportunities for OMX Stockholm and Heimstaden
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OMX and Heimstaden is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Heimstaden AB Pfd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heimstaden AB Pfd and OMX Stockholm 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 OMX Stockholm Mid are associated (or correlated) with Heimstaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heimstaden AB Pfd has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Heimstaden go up and down completely randomly.
Pair Corralation between OMX Stockholm and Heimstaden
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to under-perform the Heimstaden. But the index apears to be less risky and, when comparing its historical volatility, OMX Stockholm Mid is 2.33 times less risky than Heimstaden. The index trades about -0.04 of its potential returns per unit of risk. The Heimstaden AB Pfd is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,130 in Heimstaden AB Pfd on August 29, 2024 and sell it today you would earn a total of 306.00 from holding Heimstaden AB Pfd or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Heimstaden AB Pfd
Performance |
| Timeline |
OMX Stockholm and Heimstaden Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Heimstaden AB Pfd
Pair trading matchups for Heimstaden
Pair Trading with OMX Stockholm and Heimstaden
The main advantage of trading using opposite OMX Stockholm and Heimstaden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Heimstaden 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 Heimstaden will offset losses from the drop in Heimstaden's long position.| OMX Stockholm vs. Svenska Handelsbanken AB | OMX Stockholm vs. FormPipe Software AB | OMX Stockholm vs. Skandinaviska Enskilda Banken | OMX Stockholm vs. Online Brands Nordic |
| Heimstaden vs. Corem Property Group | Heimstaden vs. Samhaellsbyggnadsbolaget i Norden | Heimstaden vs. Cibus Nordic Real | Heimstaden vs. ALM Equity 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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