Correlation Between Wallenstam and FastPartner

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

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

Diversification Opportunities for Wallenstam and FastPartner

-0.09

Correlation Coefficient

Wallenstam  FastPartner

Good diversification

The 3 months correlation between Wallenstam and FastPartner is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Wallenstam AB and FastPartner AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FastPartner AB and Wallenstam 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 Wallenstam AB are associated (or correlated) with FastPartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FastPartner AB has no effect on the direction of Wallenstam i.e., Wallenstam and FastPartner go up and down completely randomly.

Pair Corralation between Wallenstam and FastPartner

Assuming the 90 days trading horizon Wallenstam AB is expected to generate 0.57 times more return on investment than FastPartner. However, Wallenstam AB is 1.75 times less risky than FastPartner. It trades about -0.07 of its potential returns per unit of risk. FastPartner AB is currently generating about -0.08 per unit of risk. If you would invest  5,140  in Wallenstam AB on November 29, 2024 and sell it today you would lose (380.00) from holding Wallenstam AB or give up 7.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Wallenstam AB  vs.  FastPartner AB

Wallenstam AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wallenstam AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

FastPartner AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days FastPartner AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wallenstam and FastPartner

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

The idea behind Wallenstam AB and FastPartner 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.