Correlation Between Corem Property and HEBA Fastighets

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

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

Diversification Opportunities for Corem Property and HEBA Fastighets

0.56

Correlation Coefficient

Corem Property  HEBA Fastighets

Very weak diversification

The 3 months correlation between Corem and HEBA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Corem Property Group and HEBA Fastighets AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEBA Fastighets AB and Corem Property 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 Corem Property Group are associated (or correlated) with HEBA Fastighets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEBA Fastighets AB has no effect on the direction of Corem Property i.e., Corem Property and HEBA Fastighets go up and down completely randomly.

Pair Corralation between Corem Property and HEBA Fastighets

Assuming the 90 days trading horizon Corem Property Group is expected to generate 0.87 times more return on investment than HEBA Fastighets. However, Corem Property Group is 1.14 times less risky than HEBA Fastighets. It trades about -0.01 of its potential returns per unit of risk. HEBA Fastighets AB is currently generating about -0.07 per unit of risk. If you would invest  26,738  in Corem Property Group on September 12, 2024 and sell it today you would lose (438.00) from holding Corem Property Group or give up 1.64% of portfolio value over 90 days.

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

Corem Property Group  vs.  HEBA Fastighets AB

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.

HEBA Fastighets AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Corem Property and HEBA Fastighets

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

The idea behind Corem Property Group and HEBA Fastighets 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.