Correlation Between Speqta Publ and Dios Fastigheter

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

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

Diversification Opportunities for Speqta Publ and Dios Fastigheter

-0.63

Correlation Coefficient

Speqta Publ  Dios Fastigheter

Excellent diversification

The 3 months correlation between Speqta and Dios is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Speqta publ AB and Dios Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dios Fastigheter and Speqta Publ 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 Speqta publ AB are associated (or correlated) with Dios Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dios Fastigheter has no effect on the direction of Speqta Publ i.e., Speqta Publ and Dios Fastigheter go up and down completely randomly.

Pair Corralation between Speqta Publ and Dios Fastigheter

Assuming the 90 days trading horizon Speqta publ AB is expected to generate 3.59 times more return on investment than Dios Fastigheter. However, Speqta Publ is 3.59 times more volatile than Dios Fastigheter AB. It trades about 0.02 of its potential returns per unit of risk. Dios Fastigheter AB is currently generating about -0.03 per unit of risk. If you would invest  517.00  in Speqta publ AB on February 3, 2024 and sell it today you would lose (8.00) from holding Speqta publ AB or give up 1.55% of portfolio value over 90 days.

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

Speqta publ AB  vs.  Dios Fastigheter AB

Speqta publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Speqta publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Dios Fastigheter

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dios Fastigheter AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Dios Fastigheter may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Speqta Publ and Dios Fastigheter

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

The idea behind Speqta publ AB and Dios 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.