Correlation Between Wallenstam and Fabege AB
Can any of the company-specific risk be diversified away by investing in both Wallenstam and Fabege AB 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 Wallenstam and Fabege AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallenstam AB and Fabege AB, you can compare the effects of market volatilities on Wallenstam and Fabege AB 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 Wallenstam with a short position of Fabege AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallenstam and Fabege AB.
Diversification Opportunities for Wallenstam and Fabege AB
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wallenstam and Fabege is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Wallenstam AB and Fabege AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabege AB and Wallenstam 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 Wallenstam AB are associated (or correlated) with Fabege AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabege AB has no effect on the direction of Wallenstam i.e., Wallenstam and Fabege AB go up and down completely randomly.
Pair Corralation between Wallenstam and Fabege AB
Assuming the 90 days trading horizon Wallenstam AB is expected to generate 0.94 times more return on investment than Fabege AB. However, Wallenstam AB is 1.06 times less risky than Fabege AB. It trades about 0.02 of its potential returns per unit of risk. Fabege AB is currently generating about -0.01 per unit of risk. If you would invest 5,120 in Wallenstam AB on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Wallenstam AB or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallenstam AB vs. Fabege AB
Performance |
| Timeline |
| Wallenstam AB |
| Fabege AB |
Wallenstam and Fabege AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallenstam and Fabege AB
The main advantage of trading using opposite Wallenstam and Fabege AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallenstam position performs unexpectedly, Fabege AB 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 Fabege AB will offset losses from the drop in Fabege AB's long position.| Wallenstam vs. FastPartner AB | Wallenstam vs. Svolder AB | Wallenstam vs. Fastighets AB Balder | Wallenstam vs. Cibus Nordic Real |
| Fabege AB vs. Castellum AB | Fabege AB vs. Fastighets AB Balder | Fabege AB vs. Wallenstam AB | Fabege AB vs. Hufvudstaden 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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