Correlation Between Dios Fastigheter and AB Sagax

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

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

Diversification Opportunities for Dios Fastigheter and AB Sagax

0.8

Correlation Coefficient

Dios Fastigheter  AB Sagax

Very poor diversification

The 3 months correlation between Dios and SAGA-B is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dios Fastigheter AB and AB Sagax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Sagax and Dios 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 Dios Fastigheter AB are associated (or correlated) with AB Sagax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Sagax has no effect on the direction of Dios Fastigheter i.e., Dios Fastigheter and AB Sagax go up and down completely randomly.

Pair Corralation between Dios Fastigheter and AB Sagax

Assuming the 90 days trading horizon Dios Fastigheter AB is expected to under-perform the AB Sagax. But the stock apears to be less risky and, when comparing its historical volatility, Dios Fastigheter AB is 1.07 times less risky than AB Sagax. The stock trades about -0.15 of its potential returns per unit of risk. The AB Sagax is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  22,620  in AB Sagax on December 30, 2024 and sell it today you would lose (1,380) from holding AB Sagax or give up 6.1% of portfolio value over 90 days.

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

Dios Fastigheter AB  vs.  AB Sagax

Dios Fastigheter

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AB Sagax

Risk-Adjusted Performance

Very Weak

Over the last 90 days AB Sagax has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, AB Sagax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dios Fastigheter and AB Sagax

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

The idea behind Dios Fastigheter AB and AB Sagax 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.