Correlation Between FrontView REIT, and Holmen AB

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, and Holmen AB 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 FrontView REIT, and Holmen AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for FrontView REIT, and Holmen AB

-0.31

Correlation Coefficient

FrontView REIT,  Holmen AB

Very good diversification

The 3 months correlation between FrontView and Holmen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Holmen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holmen AB and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with Holmen AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holmen AB has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Holmen AB go up and down completely randomly.

Pair Corralation between FrontView REIT, and Holmen AB

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Holmen AB. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.23 times less risky than Holmen AB. The stock trades about -0.03 of its potential returns per unit of risk. The Holmen AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,670  in Holmen AB on September 20, 2024 and sell it today you would earn a total of  956.00  from holding Holmen AB or generate 35.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	11.09%
Values	Daily Returns

FrontView REIT,  vs.  Holmen AB

FrontView REIT,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Holmen AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Holmen AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Holmen AB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FrontView REIT, and Holmen AB

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

The idea behind FrontView REIT, and Holmen 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.