Correlation Between AES and NP3 Fastigheter

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

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

Diversification Opportunities for AES and NP3 Fastigheter

0.28

Correlation Coefficient

AES  NP3 Fastigheter

Modest diversification

The 3 months correlation between AES and NP3 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding The AES 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 AES 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 The AES 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 AES i.e., AES and NP3 Fastigheter go up and down completely randomly.

Pair Corralation between AES and NP3 Fastigheter

Considering the 90-day investment horizon The AES is expected to generate 2.19 times more return on investment than NP3 Fastigheter. However, AES is 2.19 times more volatile than NP3 Fastigheter AB. It trades about 0.16 of its potential returns per unit of risk. NP3 Fastigheter AB is currently generating about 0.03 per unit of risk. If you would invest  994.00  in The AES on May 25, 2025 and sell it today you would earn a total of  355.00  from holding The AES or generate 35.71% return on investment over 90 days.

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

The AES  vs.  NP3 Fastigheter AB

AES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, AES unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 comparatively stable basic indicators, NP3 Fastigheter is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AES and NP3 Fastigheter

The main advantage of trading using opposite AES and NP3 Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES 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 The AES 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.