Correlation Between Fastighets and Corem Property

Can any of the company-specific risk be diversified away by investing in both Fastighets and Corem Property 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 Fastighets and Corem Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fastighets AB Balder and Corem Property Group, you can compare the effects of market volatilities on Fastighets and Corem Property 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 Fastighets with a short position of Corem Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastighets and Corem Property.

Diversification Opportunities for Fastighets and Corem Property

0.65

Correlation Coefficient

Fastighets  Corem Property

Poor diversification

The 3 months correlation between Fastighets and Corem is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fastighets AB Balder and Corem Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corem Property Group and Fastighets 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 Fastighets AB Balder are associated (or correlated) with Corem Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corem Property Group has no effect on the direction of Fastighets i.e., Fastighets and Corem Property go up and down completely randomly.

Pair Corralation between Fastighets and Corem Property

Assuming the 90 days trading horizon Fastighets AB Balder is expected to under-perform the Corem Property. In addition to that, Fastighets is 1.31 times more volatile than Corem Property Group. It trades about -0.07 of its total potential returns per unit of risk. Corem Property Group is currently generating about -0.03 per unit of volatility. If you would invest  27,377  in Corem Property Group on September 14, 2024 and sell it today you would lose (877.00) from holding Corem Property Group or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fastighets AB Balder  vs.  Corem Property Group

Fastighets AB Balder

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fastighets AB Balder has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Corem Property Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corem Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Corem Property is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Fastighets and Corem Property

The main advantage of trading using opposite Fastighets and Corem Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastighets position performs unexpectedly, Corem Property 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 Corem Property will offset losses from the drop in Corem Property's long position.

The idea behind Fastighets AB Balder and Corem Property Group 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.