Correlation Between SBB-D and NP3 Fastigheter

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

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

Diversification Opportunities for SBB-D and NP3 Fastigheter

0.46

Correlation Coefficient

SBB-D  NP3 Fastigheter

Very weak diversification

The 3 months correlation between SBB-D and NP3 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Samhaellsbyggnadsbolaget i Nor and NP3 Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NP3 Fastigheter AB and SBB-D 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 Samhaellsbyggnadsbolaget i Norden are associated (or correlated) with NP3 Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NP3 Fastigheter AB has no effect on the direction of SBB-D i.e., SBB-D and NP3 Fastigheter go up and down completely randomly.

Pair Corralation between SBB-D and NP3 Fastigheter

Assuming the 90 days trading horizon Samhaellsbyggnadsbolaget i Norden is expected to under-perform the NP3 Fastigheter. In addition to that, SBB-D is 9.18 times more volatile than NP3 Fastigheter AB. It trades about -0.06 of its total potential returns per unit of risk. NP3 Fastigheter AB is currently generating about 0.04 per unit of volatility. If you would invest  2,941  in NP3 Fastigheter AB on December 30, 2024 and sell it today you would earn a total of  24.00  from holding NP3 Fastigheter AB or generate 0.82% return on investment over 90 days.

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

Samhaellsbyggnadsbolaget i Nor  vs.  NP3 Fastigheter AB

Samhaellsbyggnadsbol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samhaellsbyggnadsbolaget i Norden 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NP3 Fastigheter AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NP3 Fastigheter AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, NP3 Fastigheter is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SBB-D and NP3 Fastigheter

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

The idea behind Samhaellsbyggnadsbolaget i Norden and NP3 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.

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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.