Correlation Between Diös Fastigheter and FRASERS PROPERTY

Can any of the company-specific risk be diversified away by investing in both Diös Fastigheter and FRASERS PROPERTY 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 Diös Fastigheter and FRASERS PROPERTY 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 FRASERS PROPERTY, you can compare the effects of market volatilities on Diös Fastigheter and FRASERS PROPERTY 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 Diös Fastigheter with a short position of FRASERS PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diös Fastigheter and FRASERS PROPERTY.

Diversification Opportunities for Diös Fastigheter and FRASERS PROPERTY

0.75

Correlation Coefficient

Diös Fastigheter  FRASERS PROPERTY

Poor diversification

The 3 months correlation between Diös and FRASERS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dis Fastigheter AB and FRASERS PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRASERS PROPERTY and Diös 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 FRASERS PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRASERS PROPERTY has no effect on the direction of Diös Fastigheter i.e., Diös Fastigheter and FRASERS PROPERTY go up and down completely randomly.

Pair Corralation between Diös Fastigheter and FRASERS PROPERTY

Assuming the 90 days horizon Dis Fastigheter AB is expected to under-perform the FRASERS PROPERTY. But the stock apears to be less risky and, when comparing its historical volatility, Dis Fastigheter AB is 1.05 times less risky than FRASERS PROPERTY. The stock trades about -0.06 of its potential returns per unit of risk. The FRASERS PROPERTY is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  60.00  in FRASERS PROPERTY on December 25, 2024 and sell it today you would lose (4.00) from holding FRASERS PROPERTY or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Dis Fastigheter AB  vs.  FRASERS PROPERTY

Dis Fastigheter AB

Risk-Adjusted Performance

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 uncertain 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.

FRASERS PROPERTY

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Diös Fastigheter and FRASERS PROPERTY

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

The idea behind Dis Fastigheter AB and FRASERS PROPERTY 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.