Correlation Between Platzer Fastigheter and Castellum

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

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

Diversification Opportunities for Platzer Fastigheter and Castellum

0.61

Correlation Coefficient

Platzer Fastigheter  Castellum

Poor diversification

The 3 months correlation between Platzer and Castellum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Platzer Fastigheter Holding and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB and Platzer 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 Platzer Fastigheter Holding are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of Platzer Fastigheter i.e., Platzer Fastigheter and Castellum go up and down completely randomly.

Pair Corralation between Platzer Fastigheter and Castellum

Assuming the 90 days trading horizon Platzer Fastigheter Holding is expected to generate 1.48 times more return on investment than Castellum. However, Platzer Fastigheter is 1.48 times more volatile than Castellum AB. It trades about -0.03 of its potential returns per unit of risk. Castellum AB is currently generating about -0.1 per unit of risk. If you would invest  8,760  in Platzer Fastigheter Holding on December 2, 2024 and sell it today you would lose (350.00) from holding Platzer Fastigheter Holding or give up 4.0% of portfolio value over 90 days.

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

Platzer Fastigheter Holding  vs.  Castellum AB

Platzer Fastigheter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Platzer Fastigheter Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Platzer Fastigheter is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Castellum AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castellum AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Platzer Fastigheter and Castellum

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

The idea behind Platzer Fastigheter Holding and Castellum 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.