Correlation Between SBB-B and Fagerhult
Can any of the company-specific risk be diversified away by investing in both SBB-B and Fagerhult 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 SBB-B and Fagerhult into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhllsbyggnadsbolaget i Norden and Fagerhult AB, you can compare the effects of market volatilities on SBB-B and Fagerhult 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 SBB-B with a short position of Fagerhult. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Fagerhult.
Diversification Opportunities for SBB-B and Fagerhult
Poor diversification
The 3 months correlation between SBB-B and Fagerhult is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Fagerhult AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fagerhult AB and SBB-B 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 Samhllsbyggnadsbolaget i Norden are associated (or correlated) with Fagerhult. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fagerhult AB has no effect on the direction of SBB-B i.e., SBB-B and Fagerhult go up and down completely randomly.
Pair Corralation between SBB-B and Fagerhult
Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to under-perform the Fagerhult. In addition to that, SBB-B is 3.48 times more volatile than Fagerhult AB. It trades about -0.17 of its total potential returns per unit of risk. Fagerhult AB is currently generating about -0.19 per unit of volatility. If you would invest 6,750 in Fagerhult AB on September 2, 2024 and sell it today you would lose (1,000.00) from holding Fagerhult AB or give up 14.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhllsbyggnadsbolaget i Norde vs. Fagerhult AB
Performance |
| Timeline |
| Samhllsbyggnadsbolaget |
| Fagerhult AB |
SBB-B and Fagerhult Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBB-B and Fagerhult
The main advantage of trading using opposite SBB-B and Fagerhult positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-B position performs unexpectedly, Fagerhult 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 Fagerhult will offset losses from the drop in Fagerhult's long position.| SBB-B vs. FastPartner AB | SBB-B vs. Svolder AB | SBB-B vs. Fastighets AB Balder | SBB-B vs. Cibus Nordic Real |
| Fagerhult vs. Samhllsbyggnadsbolaget i Norden | Fagerhult vs. Sinch AB | Fagerhult vs. Embracer Group AB | Fagerhult vs. Evolution 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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