Correlation Between HEBA Fastighets and Heimstaden

Can any of the company-specific risk be diversified away by investing in both HEBA Fastighets and Heimstaden 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 Heimstaden 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 Heimstaden AB Pfd, you can compare the effects of market volatilities on HEBA Fastighets and Heimstaden 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 Heimstaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEBA Fastighets and Heimstaden.

Diversification Opportunities for HEBA Fastighets and Heimstaden

0.41

Correlation Coefficient

HEBA Fastighets  Heimstaden

Very weak diversification

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

Pair Corralation between HEBA Fastighets and Heimstaden

Assuming the 90 days trading horizon HEBA Fastighets is expected to generate 2.2 times less return on investment than Heimstaden. But when comparing it to its historical volatility, HEBA Fastighets AB is 1.74 times less risky than Heimstaden. It trades about 0.14 of its potential returns per unit of risk. Heimstaden AB Pfd is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,948  in Heimstaden AB Pfd on August 2, 2025 and sell it today you would earn a total of  202.00  from holding Heimstaden AB Pfd or generate 10.37% return on investment over 90 days.

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

HEBA Fastighets AB  vs.  Heimstaden AB Pfd

HEBA Fastighets AB

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in HEBA Fastighets AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, HEBA Fastighets is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Heimstaden AB Pfd

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Heimstaden AB Pfd are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Heimstaden reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEBA Fastighets and Heimstaden

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

The idea behind HEBA Fastighets AB and Heimstaden AB Pfd 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.