Correlation Between HEBA Fastighets and Bonasudden Holding

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

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

Diversification Opportunities for HEBA Fastighets and Bonasudden Holding

0.41

Correlation Coefficient

HEBA Fastighets  Bonasudden Holding

Very weak diversification

The 3 months correlation between HEBA and Bonasudden is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HEBA Fastighets AB and Bonasudden Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonasudden Holding and HEBA Fastighets 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 HEBA Fastighets AB are associated (or correlated) with Bonasudden Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonasudden Holding has no effect on the direction of HEBA Fastighets i.e., HEBA Fastighets and Bonasudden Holding go up and down completely randomly.

Pair Corralation between HEBA Fastighets and Bonasudden Holding

Assuming the 90 days trading horizon HEBA Fastighets AB is expected to generate 1.44 times more return on investment than Bonasudden Holding. However, HEBA Fastighets is 1.44 times more volatile than Bonasudden Holding AB. It trades about 0.0 of its potential returns per unit of risk. Bonasudden Holding AB is currently generating about -0.12 per unit of risk. If you would invest  3,140  in HEBA Fastighets AB on May 28, 2025 and sell it today you would lose (20.00) from holding HEBA Fastighets AB or give up 0.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

HEBA Fastighets AB  vs.  Bonasudden Holding AB

HEBA Fastighets AB

Risk-Adjusted Performance

Weakest

Over the last 90 days HEBA Fastighets AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, HEBA Fastighets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bonasudden Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days Bonasudden Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with HEBA Fastighets and Bonasudden Holding

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

The idea behind HEBA Fastighets AB and Bonasudden Holding 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.