Correlation Between AB Sagax and Brinova Fastigheter
Can any of the company-specific risk be diversified away by investing in both AB Sagax and Brinova Fastigheter 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 Brinova Fastigheter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Sagax and Brinova Fastigheter AB, you can compare the effects of market volatilities on AB Sagax and Brinova Fastigheter 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 Brinova Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Sagax and Brinova Fastigheter.
Diversification Opportunities for AB Sagax and Brinova Fastigheter
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAGA-D and Brinova is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Brinova Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinova Fastigheter 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 Brinova Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinova Fastigheter has no effect on the direction of AB Sagax i.e., AB Sagax and Brinova Fastigheter go up and down completely randomly.
Pair Corralation between AB Sagax and Brinova Fastigheter
Assuming the 90 days trading horizon AB Sagax is expected to generate 1.29 times less return on investment than Brinova Fastigheter. But when comparing it to its historical volatility, AB Sagax is 2.72 times less risky than Brinova Fastigheter. It trades about 0.09 of its potential returns per unit of risk. Brinova Fastigheter AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,730 in Brinova Fastigheter AB on September 1, 2024 and sell it today you would earn a total of 590.00 from holding Brinova Fastigheter AB or generate 34.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
AB Sagax vs. Brinova Fastigheter AB
Performance |
| Timeline |
| AB Sagax |
| Brinova Fastigheter |
AB Sagax and Brinova Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Sagax and Brinova Fastigheter
The main advantage of trading using opposite AB Sagax and Brinova Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Sagax position performs unexpectedly, Brinova Fastigheter 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 Brinova Fastigheter will offset losses from the drop in Brinova Fastigheter's long position.| AB Sagax vs. AB Sagax | AB Sagax vs. Samhaellsbyggnadsbolaget i Norden | AB Sagax vs. AB Sagax | AB Sagax vs. Fastighets AB Balder |
| Brinova Fastigheter vs. Catena AB | Brinova Fastigheter vs. Dios Fastigheter AB | Brinova Fastigheter vs. Wihlborgs Fastigheter AB | Brinova Fastigheter vs. Fabege 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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