Correlation Between NP3 Fastigheter and Havsfrun Investment

Can any of the company-specific risk be diversified away by investing in both NP3 Fastigheter and Havsfrun Investment 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 NP3 Fastigheter and Havsfrun Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NP3 Fastigheter AB and Havsfrun Investment AB, you can compare the effects of market volatilities on NP3 Fastigheter and Havsfrun Investment 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 NP3 Fastigheter with a short position of Havsfrun Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NP3 Fastigheter and Havsfrun Investment.

Diversification Opportunities for NP3 Fastigheter and Havsfrun Investment

-0.75

Correlation Coefficient

NP3 Fastigheter  Havsfrun Investment

Pay attention - limited upside

The 3 months correlation between NP3 and Havsfrun is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding NP3 Fastigheter AB and Havsfrun Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havsfrun Investment and NP3 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 NP3 Fastigheter AB are associated (or correlated) with Havsfrun Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havsfrun Investment has no effect on the direction of NP3 Fastigheter i.e., NP3 Fastigheter and Havsfrun Investment go up and down completely randomly.

Pair Corralation between NP3 Fastigheter and Havsfrun Investment

Assuming the 90 days trading horizon NP3 Fastigheter AB is expected to under-perform the Havsfrun Investment. But the stock apears to be less risky and, when comparing its historical volatility, NP3 Fastigheter AB is 1.22 times less risky than Havsfrun Investment. The stock trades about -0.27 of its potential returns per unit of risk. The Havsfrun Investment AB is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,205  in Havsfrun Investment AB on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Havsfrun Investment AB or generate 8.3% return on investment over 90 days.

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

NP3 Fastigheter AB  vs.  Havsfrun Investment AB

NP3 Fastigheter AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NP3 Fastigheter AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Havsfrun Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Havsfrun Investment AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Havsfrun Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NP3 Fastigheter and Havsfrun Investment

The main advantage of trading using opposite NP3 Fastigheter and Havsfrun Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NP3 Fastigheter position performs unexpectedly, Havsfrun Investment 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 Havsfrun Investment will offset losses from the drop in Havsfrun Investment's long position.

The idea behind NP3 Fastigheter AB and Havsfrun Investment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.