Correlation Between Strategic Investments and Fast Ejendom
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and Fast Ejendom 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 Strategic Investments and Fast Ejendom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Fast Ejendom, you can compare the effects of market volatilities on Strategic Investments and Fast Ejendom 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 Strategic Investments with a short position of Fast Ejendom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Fast Ejendom.
Diversification Opportunities for Strategic Investments and Fast Ejendom
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and Fast is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Fast Ejendom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Ejendom and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with Fast Ejendom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Ejendom has no effect on the direction of Strategic Investments i.e., Strategic Investments and Fast Ejendom go up and down completely randomly.
Pair Corralation between Strategic Investments and Fast Ejendom
Assuming the 90 days trading horizon Strategic Investments AS is expected to generate 4.66 times more return on investment than Fast Ejendom. However, Strategic Investments is 4.66 times more volatile than Fast Ejendom. It trades about 0.04 of its potential returns per unit of risk. Fast Ejendom is currently generating about -0.11 per unit of risk. If you would invest 105.00 in Strategic Investments AS on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Strategic Investments AS or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Fast Ejendom
Performance |
| Timeline |
| Strategic Investments |
| Fast Ejendom |
Strategic Investments and Fast Ejendom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Fast Ejendom
The main advantage of trading using opposite Strategic Investments and Fast Ejendom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, Fast Ejendom 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 Fast Ejendom will offset losses from the drop in Fast Ejendom's long position.| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS |
| Fast Ejendom vs. Jeudan | Fast Ejendom vs. Copenhagen Capital AS | Fast Ejendom vs. Cemat AS | Fast Ejendom vs. Movinn AS |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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