Correlation Between Fastighets and Wihlborgs Fastigheter
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fastighets AB Balder vs. Wihlborgs Fastigheter AB
Performance |
Timeline |
Fastighets AB Balder |
Wihlborgs Fastigheter |
Fastighets and Wihlborgs Fastigheter Volatility Contrast
Predicted Return Density |
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.Fastighets vs. Castellum AB | ||
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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