Correlation Between Platzer Fastigheter and K Fast

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

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

Diversification Opportunities for Platzer Fastigheter and K Fast

0.92

Correlation Coefficient

Platzer Fastigheter  K Fast

Almost no diversification

The 3 months correlation between Platzer and KFAST-B is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Platzer Fastigheter Holding and K Fast Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Fast Holding and Platzer 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 Platzer Fastigheter Holding are associated (or correlated) with K Fast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Fast Holding has no effect on the direction of Platzer Fastigheter i.e., Platzer Fastigheter and K Fast go up and down completely randomly.

Pair Corralation between Platzer Fastigheter and K Fast

Assuming the 90 days trading horizon Platzer Fastigheter Holding is expected to generate 0.85 times more return on investment than K Fast. However, Platzer Fastigheter Holding is 1.18 times less risky than K Fast. It trades about -0.14 of its potential returns per unit of risk. K Fast Holding AB is currently generating about -0.13 per unit of risk. If you would invest  10,202  in Platzer Fastigheter Holding on September 12, 2024 and sell it today you would lose (1,622) from holding Platzer Fastigheter Holding or give up 15.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Platzer Fastigheter Holding  vs.  K Fast Holding AB

Platzer Fastigheter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platzer Fastigheter Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

K Fast Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K Fast Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Platzer Fastigheter and K Fast

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

The idea behind Platzer Fastigheter Holding and K Fast Holding 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.