Correlation Between GuocoLand and Dis Fastigheter

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

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

Diversification Opportunities for GuocoLand and Dis Fastigheter

-0.72

Correlation Coefficient

GuocoLand  Dis Fastigheter

Pay attention - limited upside

The 3 months correlation between GuocoLand and Dis is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GuocoLand Limited and Dis Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dis Fastigheter AB and GuocoLand 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 GuocoLand Limited are associated (or correlated) with Dis Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dis Fastigheter AB has no effect on the direction of GuocoLand i.e., GuocoLand and Dis Fastigheter go up and down completely randomly.

Pair Corralation between GuocoLand and Dis Fastigheter

Assuming the 90 days trading horizon GuocoLand Limited is expected to under-perform the Dis Fastigheter. But the stock apears to be less risky and, when comparing its historical volatility, GuocoLand Limited is 8.63 times less risky than Dis Fastigheter. The stock trades about -0.21 of its potential returns per unit of risk. The Dis Fastigheter AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  635.00  in Dis Fastigheter AB on September 23, 2024 and sell it today you would earn a total of  24.00  from holding Dis Fastigheter AB or generate 3.78% return on investment over 90 days.

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

GuocoLand Limited  vs.  Dis Fastigheter AB

GuocoLand Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GuocoLand Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GuocoLand is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Dis Fastigheter AB

Risk-Adjusted Performance

0 of 100

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 fragile 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.

Pair Trading with GuocoLand and Dis Fastigheter

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

The idea behind GuocoLand Limited and Dis 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.