Correlation Between Fasadgruppen Group and Instalco Intressenter

Can any of the company-specific risk be diversified away by investing in both Fasadgruppen Group and Instalco Intressenter 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 Fasadgruppen Group and Instalco Intressenter into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Fasadgruppen Group and Instalco Intressenter

-0.42

Correlation Coefficient

Fasadgruppen Group  Instalco Intressenter

Very good diversification

The 3 months correlation between Fasadgruppen and Instalco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fasadgruppen Group AB and Instalco Intressenter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instalco Intressenter and Fasadgruppen Group 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 Fasadgruppen Group AB are associated (or correlated) with Instalco Intressenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instalco Intressenter has no effect on the direction of Fasadgruppen Group i.e., Fasadgruppen Group and Instalco Intressenter go up and down completely randomly.

Pair Corralation between Fasadgruppen Group and Instalco Intressenter

Assuming the 90 days horizon Fasadgruppen Group AB is expected to under-perform the Instalco Intressenter. In addition to that, Fasadgruppen Group is 2.02 times more volatile than Instalco Intressenter AB. It trades about -0.22 of its total potential returns per unit of risk. Instalco Intressenter AB is currently generating about 0.09 per unit of volatility. If you would invest  3,076  in Instalco Intressenter AB on November 29, 2024 and sell it today you would earn a total of  384.00  from holding Instalco Intressenter AB or generate 12.48% return on investment over 90 days.

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

Fasadgruppen Group AB  vs.  Instalco Intressenter AB

Fasadgruppen Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fasadgruppen Group 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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Instalco Intressenter

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Instalco Intressenter AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Instalco Intressenter sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fasadgruppen Group and Instalco Intressenter

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

The idea behind Fasadgruppen Group AB and Instalco Intressenter 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.