Correlation Between Wihlborgs Fastigheter and AB Sagax

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

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

Diversification Opportunities for Wihlborgs Fastigheter and AB Sagax

0.79

Correlation Coefficient

Wihlborgs Fastigheter  AB Sagax

Poor diversification

The 3 months correlation between Wihlborgs and SAGA-B is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wihlborgs Fastigheter AB and AB Sagax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Sagax and Wihlborgs 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 Wihlborgs Fastigheter AB are associated (or correlated) with AB Sagax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Sagax has no effect on the direction of Wihlborgs Fastigheter i.e., Wihlborgs Fastigheter and AB Sagax go up and down completely randomly.

Pair Corralation between Wihlborgs Fastigheter and AB Sagax

Assuming the 90 days trading horizon Wihlborgs Fastigheter AB is expected to generate 0.89 times more return on investment than AB Sagax. However, Wihlborgs Fastigheter AB is 1.12 times less risky than AB Sagax. It trades about 0.03 of its potential returns per unit of risk. AB Sagax is currently generating about -0.11 per unit of risk. If you would invest  10,860  in Wihlborgs Fastigheter AB on August 31, 2024 and sell it today you would earn a total of  230.00  from holding Wihlborgs Fastigheter AB or generate 2.12% return on investment over 90 days.

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

Wihlborgs Fastigheter AB  vs.  AB Sagax

Wihlborgs Fastigheter

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wihlborgs Fastigheter AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Wihlborgs Fastigheter is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AB Sagax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wihlborgs Fastigheter and AB Sagax

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

The idea behind Wihlborgs Fastigheter AB and AB Sagax 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.