Correlation Between AB Sagax and Nyfosa AB
Can any of the company-specific risk be diversified away by investing in both AB Sagax and Nyfosa 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 AB Sagax and Nyfosa AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Sagax and Nyfosa AB, you can compare the effects of market volatilities on AB Sagax and Nyfosa 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 AB Sagax with a short position of Nyfosa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Sagax and Nyfosa AB.
Diversification Opportunities for AB Sagax and Nyfosa AB
Almost no diversification
The 3 months correlation between SAGA-B and Nyfosa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Nyfosa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyfosa AB and AB Sagax 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 AB Sagax are associated (or correlated) with Nyfosa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyfosa AB has no effect on the direction of AB Sagax i.e., AB Sagax and Nyfosa AB go up and down completely randomly.
Pair Corralation between AB Sagax and Nyfosa AB
Assuming the 90 days trading horizon AB Sagax is expected to generate 0.82 times more return on investment than Nyfosa AB. However, AB Sagax is 1.22 times less risky than Nyfosa AB. It trades about -0.34 of its potential returns per unit of risk. Nyfosa AB is currently generating about -0.3 per unit of risk. If you would invest 26,560 in AB Sagax on August 28, 2024 and sell it today you would lose (2,780) from holding AB Sagax or give up 10.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Sagax vs. Nyfosa AB
Performance |
| Timeline |
| AB Sagax |
| Nyfosa AB |
AB Sagax and Nyfosa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Sagax and Nyfosa AB
The main advantage of trading using opposite AB Sagax and Nyfosa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Sagax position performs unexpectedly, Nyfosa 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 Nyfosa AB will offset losses from the drop in Nyfosa AB's long position.| AB Sagax vs. Fastighets AB Balder | AB Sagax vs. Nyfosa AB | AB Sagax vs. Dios Fastigheter AB | AB Sagax vs. Atrium Ljungberg 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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