Correlation Between Dis Fastigheter and Strategic Investments

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

By analyzing existing cross correlation between Dis Fastigheter AB and Strategic Investments AS, you can compare the effects of market volatilities on Dis Fastigheter and Strategic Investments 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 Dis Fastigheter with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dis Fastigheter and Strategic Investments.

Diversification Opportunities for Dis Fastigheter and Strategic Investments

0.33

Correlation Coefficient

Dis Fastigheter  Strategic Investments

Weak diversification

The 3 months correlation between Dis and Strategic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dis Fastigheter AB and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Dis 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 Dis Fastigheter AB are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Dis Fastigheter i.e., Dis Fastigheter and Strategic Investments go up and down completely randomly.

Pair Corralation between Dis Fastigheter and Strategic Investments

Assuming the 90 days horizon Dis Fastigheter is expected to generate 1.15 times less return on investment than Strategic Investments. But when comparing it to its historical volatility, Dis Fastigheter AB is 2.08 times less risky than Strategic Investments. It trades about 0.03 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Strategic Investments AS on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Strategic Investments AS or generate 0.0% return on investment over 90 days.

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

Dis Fastigheter AB  vs.  Strategic Investments AS

Dis Fastigheter AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dis Fastigheter AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Strategic Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Investments AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Strategic Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dis Fastigheter and Strategic Investments

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

The idea behind Dis Fastigheter AB and Strategic Investments AS 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.