Correlation Between Dis Fastigheter and GuocoLand

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

Diversification Opportunities for Dis Fastigheter and GuocoLand

-0.74

Correlation Coefficient

Dis Fastigheter  GuocoLand

Pay attention - limited upside

The 3 months correlation between Dis and GuocoLand is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dis Fastigheter AB and GuocoLand Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GuocoLand Limited 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 GuocoLand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GuocoLand Limited has no effect on the direction of Dis Fastigheter i.e., Dis Fastigheter and GuocoLand go up and down completely randomly.

Pair Corralation between Dis Fastigheter and GuocoLand

Assuming the 90 days horizon Dis Fastigheter AB is expected to generate 4.87 times more return on investment than GuocoLand. However, Dis Fastigheter is 4.87 times more volatile than GuocoLand Limited. It trades about 0.04 of its potential returns per unit of risk. GuocoLand Limited is currently generating about 0.07 per unit of risk. If you would invest  508.00  in Dis Fastigheter AB on September 24, 2024 and sell it today you would earn a total of  151.00  from holding Dis Fastigheter AB or generate 29.72% return on investment over 90 days.

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

Dis Fastigheter AB  vs.  GuocoLand Limited

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.

GuocoLand Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GuocoLand Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GuocoLand is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dis Fastigheter and GuocoLand

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

The idea behind Dis Fastigheter AB and GuocoLand Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.