Correlation Between SBB-D and Akelius Residential
Can any of the company-specific risk be diversified away by investing in both SBB-D and Akelius Residential 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-D and Akelius Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhaellsbyggnadsbolaget i Norden and Akelius Residential Property, you can compare the effects of market volatilities on SBB-D and Akelius Residential 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-D with a short position of Akelius Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-D and Akelius Residential.
Diversification Opportunities for SBB-D and Akelius Residential
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SBB-D and Akelius is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samhaellsbyggnadsbolaget i Nor and Akelius Residential Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akelius Residential and SBB-D 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 Samhaellsbyggnadsbolaget i Norden are associated (or correlated) with Akelius Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akelius Residential has no effect on the direction of SBB-D i.e., SBB-D and Akelius Residential go up and down completely randomly.
Pair Corralation between SBB-D and Akelius Residential
Assuming the 90 days trading horizon Samhaellsbyggnadsbolaget i Norden is expected to under-perform the Akelius Residential. In addition to that, SBB-D is 4.97 times more volatile than Akelius Residential Property. It trades about -0.14 of its total potential returns per unit of risk. Akelius Residential Property is currently generating about 0.16 per unit of volatility. If you would invest 163.00 in Akelius Residential Property on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Akelius Residential Property or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhaellsbyggnadsbolaget i Nor vs. Akelius Residential Property
Performance |
| Timeline |
| Samhaellsbyggnadsbol |
| Akelius Residential |
SBB-D and Akelius Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBB-D and Akelius Residential
The main advantage of trading using opposite SBB-D and Akelius Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-D position performs unexpectedly, Akelius Residential 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 Akelius Residential will offset losses from the drop in Akelius Residential's long position.The idea behind Samhaellsbyggnadsbolaget i Norden and Akelius Residential Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Akelius Residential vs. Cibus Nordic Real | Akelius Residential vs. Samhaellsbyggnadsbolaget i Norden | Akelius Residential vs. ALM Equity AB | Akelius Residential vs. Castellum 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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