Correlation Between Wihlborgs Fastigheter and Catena AB
Can any of the company-specific risk be diversified away by investing in both Wihlborgs Fastigheter and Catena 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 Wihlborgs Fastigheter and Catena AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wihlborgs Fastigheter AB and Catena AB, you can compare the effects of market volatilities on Wihlborgs Fastigheter and Catena 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 Wihlborgs Fastigheter with a short position of Catena AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wihlborgs Fastigheter and Catena AB.
Diversification Opportunities for Wihlborgs Fastigheter and Catena AB
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wihlborgs and Catena is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wihlborgs Fastigheter AB and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena AB and Wihlborgs Fastigheter 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 Wihlborgs Fastigheter AB are associated (or correlated) with Catena AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena AB has no effect on the direction of Wihlborgs Fastigheter i.e., Wihlborgs Fastigheter and Catena AB go up and down completely randomly.
Pair Corralation between Wihlborgs Fastigheter and Catena AB
Assuming the 90 days trading horizon Wihlborgs Fastigheter AB is expected to generate 0.97 times more return on investment than Catena AB. However, Wihlborgs Fastigheter AB is 1.03 times less risky than Catena AB. It trades about 0.07 of its potential returns per unit of risk. Catena AB is currently generating about 0.04 per unit of risk. If you would invest 8,753 in Wihlborgs Fastigheter AB on November 3, 2024 and sell it today you would earn a total of 2,227 from holding Wihlborgs Fastigheter AB or generate 25.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wihlborgs Fastigheter AB vs. Catena AB
Performance |
| Timeline |
| Wihlborgs Fastigheter |
| Catena AB |
Wihlborgs Fastigheter and Catena AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wihlborgs Fastigheter and Catena AB
The main advantage of trading using opposite Wihlborgs Fastigheter and Catena AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wihlborgs Fastigheter position performs unexpectedly, Catena 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 Catena AB will offset losses from the drop in Catena AB's long position.| Wihlborgs Fastigheter vs. Fabege AB | Wihlborgs Fastigheter vs. Castellum AB | Wihlborgs Fastigheter vs. Fastighets AB Balder | Wihlborgs Fastigheter vs. Wallenstam AB |
| Catena AB vs. Fastighets AB Balder | Catena AB vs. Fabege AB | Catena AB vs. Wihlborgs Fastigheter AB | Catena AB vs. AB Sagax |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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