Correlation Between AB Sagax and Platzer Fastigheter

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

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

Diversification Opportunities for AB Sagax and Platzer Fastigheter

0.97

Correlation Coefficient

AB Sagax  Platzer Fastigheter

Almost no diversification

The 3 months correlation between SAGA-B and Platzer is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Platzer Fastigheter Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platzer Fastigheter and AB Sagax 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 AB Sagax are associated (or correlated) with Platzer Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platzer Fastigheter has no effect on the direction of AB Sagax i.e., AB Sagax and Platzer Fastigheter go up and down completely randomly.

Pair Corralation between AB Sagax and Platzer Fastigheter

Assuming the 90 days trading horizon AB Sagax is expected to generate 7.05 times less return on investment than Platzer Fastigheter. But when comparing it to its historical volatility, AB Sagax is 1.17 times less risky than Platzer Fastigheter. It trades about 0.01 of its potential returns per unit of risk. Platzer Fastigheter Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,598  in Platzer Fastigheter Holding on September 14, 2024 and sell it today you would earn a total of  2,112  from holding Platzer Fastigheter Holding or generate 32.01% return on investment over 90 days.

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

AB Sagax  vs.  Platzer Fastigheter Holding

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.

Platzer Fastigheter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platzer Fastigheter Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AB Sagax and Platzer Fastigheter

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

The idea behind AB Sagax and Platzer Fastigheter Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.