Correlation Between Fundamental Invest and Fast Ejendom

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

By analyzing existing cross correlation between Fundamental Invest Stock and Fast Ejendom, you can compare the effects of market volatilities on Fundamental Invest and Fast Ejendom 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 Fundamental Invest with a short position of Fast Ejendom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Invest and Fast Ejendom.

Diversification Opportunities for Fundamental Invest and Fast Ejendom

-0.86

Correlation Coefficient

Fundamental Invest  Fast Ejendom

Pay attention - limited upside

The 3 months correlation between Fundamental and Fast is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Invest Stock and Fast Ejendom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Ejendom and Fundamental Invest 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 Fundamental Invest Stock are associated (or correlated) with Fast Ejendom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Ejendom has no effect on the direction of Fundamental Invest i.e., Fundamental Invest and Fast Ejendom go up and down completely randomly.

Pair Corralation between Fundamental Invest and Fast Ejendom

Assuming the 90 days trading horizon Fundamental Invest Stock is expected to under-perform the Fast Ejendom. But the stock apears to be less risky and, when comparing its historical volatility, Fundamental Invest Stock is 1.05 times less risky than Fast Ejendom. The stock trades about -0.12 of its potential returns per unit of risk. The Fast Ejendom is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  11,900  in Fast Ejendom on December 25, 2024 and sell it today you would earn a total of  1,500  from holding Fast Ejendom or generate 12.61% return on investment over 90 days.

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

Fundamental Invest Stock  vs.  Fast Ejendom

Fundamental Invest Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fundamental Invest Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Fast Ejendom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fast Ejendom are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Fast Ejendom displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fundamental Invest and Fast Ejendom

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

The idea behind Fundamental Invest Stock and Fast Ejendom 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.