Correlation Between AB Sagax and Dios Fastigheter

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

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

Diversification Opportunities for AB Sagax and Dios Fastigheter

0.91

Correlation Coefficient

AB Sagax  Dios Fastigheter

Almost no diversification

The 3 months correlation between SAGA-B and Dios is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Dios Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dios Fastigheter and AB Sagax 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 AB Sagax are associated (or correlated) with Dios Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dios Fastigheter has no effect on the direction of AB Sagax i.e., AB Sagax and Dios Fastigheter go up and down completely randomly.

Pair Corralation between AB Sagax and Dios Fastigheter

Assuming the 90 days trading horizon AB Sagax is expected to under-perform the Dios Fastigheter. But the stock apears to be less risky and, when comparing its historical volatility, AB Sagax is 1.07 times less risky than Dios Fastigheter. The stock trades about -0.15 of its potential returns per unit of risk. The Dios Fastigheter AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7,955  in Dios Fastigheter AB on September 5, 2024 and sell it today you would lose (10.00) from holding Dios Fastigheter AB or give up 0.13% of portfolio value over 90 days.

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

AB Sagax  vs.  Dios Fastigheter AB

AB Sagax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dios Fastigheter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dios Fastigheter AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dios Fastigheter is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AB Sagax and Dios Fastigheter

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

The idea behind AB Sagax and Dios Fastigheter 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.