Correlation Between Fastighets and Wihlborgs Fastigheter

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Can any of the company-specific risk be diversified away by investing in both Fastighets and Wihlborgs Fastigheter 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 Wihlborgs Fastigheter 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 Wihlborgs Fastigheter AB, you can compare the effects of market volatilities on Fastighets and Wihlborgs Fastigheter 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 Wihlborgs Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastighets and Wihlborgs Fastigheter.

Diversification Opportunities for Fastighets and Wihlborgs Fastigheter

FastighetsWihlborgsDiversified AwayFastighetsWihlborgsDiversified Away100%
0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fastighets and Wihlborgs is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fastighets AB Balder and Wihlborgs Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wihlborgs Fastigheter 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 Wihlborgs Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wihlborgs Fastigheter has no effect on the direction of Fastighets i.e., Fastighets and Wihlborgs Fastigheter go up and down completely randomly.

Pair Corralation between Fastighets and Wihlborgs Fastigheter

Assuming the 90 days trading horizon Fastighets AB Balder is expected to under-perform the Wihlborgs Fastigheter. In addition to that, Fastighets is 1.31 times more volatile than Wihlborgs Fastigheter AB. It trades about -0.08 of its total potential returns per unit of risk. Wihlborgs Fastigheter AB is currently generating about -0.06 per unit of volatility. If you would invest  11,220  in Wihlborgs Fastigheter AB on September 15, 2024 and sell it today you would lose (670.00) from holding Wihlborgs Fastigheter AB or give up 5.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fastighets AB Balder  vs.  Wihlborgs Fastigheter AB

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -505
JavaScript chart by amCharts 3.21.15BALD-B WIHL
       Timeline  
Fastighets AB Balder 

Risk-Adjusted Performance

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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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec7880828486889092
Wihlborgs Fastigheter 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Wihlborgs Fastigheter AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Wihlborgs Fastigheter is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec105110115120

Fastighets and Wihlborgs Fastigheter Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.93-2.19-1.46-0.720.00.661.321.992.66 0.050.100.150.20
JavaScript chart by amCharts 3.21.15BALD-B WIHL
       Returns  

Pair Trading with Fastighets and Wihlborgs Fastigheter

The main advantage of trading using opposite Fastighets and Wihlborgs Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastighets position performs unexpectedly, Wihlborgs Fastigheter 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 Wihlborgs Fastigheter will offset losses from the drop in Wihlborgs Fastigheter's long position.
The idea behind Fastighets AB Balder and Wihlborgs Fastigheter AB 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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