Correlation Between Sdiptech and Fasadgruppen Group
Can any of the company-specific risk be diversified away by investing in both Sdiptech and Fasadgruppen Group 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 Sdiptech and Fasadgruppen Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sdiptech AB and Fasadgruppen Group AB, you can compare the effects of market volatilities on Sdiptech and Fasadgruppen Group 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 Sdiptech with a short position of Fasadgruppen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sdiptech and Fasadgruppen Group.
Diversification Opportunities for Sdiptech and Fasadgruppen Group
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sdiptech and Fasadgruppen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and Fasadgruppen Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fasadgruppen Group and Sdiptech 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 Sdiptech AB are associated (or correlated) with Fasadgruppen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fasadgruppen Group has no effect on the direction of Sdiptech i.e., Sdiptech and Fasadgruppen Group go up and down completely randomly.
Pair Corralation between Sdiptech and Fasadgruppen Group
Assuming the 90 days trading horizon Sdiptech AB is expected to generate 0.93 times more return on investment than Fasadgruppen Group. However, Sdiptech AB is 1.07 times less risky than Fasadgruppen Group. It trades about 0.01 of its potential returns per unit of risk. Fasadgruppen Group AB is currently generating about -0.05 per unit of risk. If you would invest 23,991 in Sdiptech AB on August 31, 2024 and sell it today you would lose (1,111) from holding Sdiptech AB or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sdiptech AB vs. Fasadgruppen Group AB
Performance |
| Timeline |
| Sdiptech AB |
| Fasadgruppen Group |
Sdiptech and Fasadgruppen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sdiptech and Fasadgruppen Group
The main advantage of trading using opposite Sdiptech and Fasadgruppen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sdiptech position performs unexpectedly, Fasadgruppen Group 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 Fasadgruppen Group will offset losses from the drop in Fasadgruppen Group's long position.| Sdiptech vs. Bergman Beving AB | Sdiptech vs. FM Mattsson Mora | Sdiptech vs. Systemair AB | Sdiptech vs. Garo AB |
| Fasadgruppen Group vs. Green Landscaping Group | Fasadgruppen Group vs. Volati AB | Fasadgruppen Group vs. Instalco Intressenter AB | Fasadgruppen Group vs. Sdiptech 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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