Correlation Between Castellum and Dios Fastigheter

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

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

Diversification Opportunities for Castellum and Dios Fastigheter

0.75

Correlation Coefficient

Castellum  Dios Fastigheter

Poor diversification

The 3 months correlation between Castellum and Dios is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Castellum 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 Castellum 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 Castellum 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 Castellum i.e., Castellum and Dios Fastigheter go up and down completely randomly.

Pair Corralation between Castellum and Dios Fastigheter

Assuming the 90 days trading horizon Castellum AB is expected to generate 1.41 times more return on investment than Dios Fastigheter. However, Castellum is 1.41 times more volatile than Dios Fastigheter AB. It trades about 0.01 of its potential returns per unit of risk. Dios Fastigheter AB is currently generating about 0.01 per unit of risk. If you would invest  11,370  in Castellum AB on April 21, 2025 and sell it today you would earn a total of  20.00  from holding Castellum AB or generate 0.18% return on investment over 90 days.

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

Castellum AB  vs.  Dios Fastigheter AB

Castellum AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castellum AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Castellum is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Dios Fastigheter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dios Fastigheter AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dios Fastigheter is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Castellum and Dios Fastigheter

The main advantage of trading using opposite Castellum and Dios Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum 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 Castellum 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.