Correlation Between Exsitec Holding and Peab AB

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

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

Diversification Opportunities for Exsitec Holding and Peab AB

0.09

Correlation Coefficient

Exsitec Holding  Peab AB

Significant diversification

The 3 months correlation between Exsitec and Peab is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab AB and Exsitec Holding 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 Exsitec Holding AB are associated (or correlated) with Peab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peab AB has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and Peab AB go up and down completely randomly.

Pair Corralation between Exsitec Holding and Peab AB

Assuming the 90 days trading horizon Exsitec Holding AB is expected to generate 1.28 times more return on investment than Peab AB. However, Exsitec Holding is 1.28 times more volatile than Peab AB. It trades about 0.16 of its potential returns per unit of risk. Peab AB is currently generating about -0.03 per unit of risk. If you would invest  11,529  in Exsitec Holding AB on April 23, 2025 and sell it today you would earn a total of  1,921  from holding Exsitec Holding AB or generate 16.66% return on investment over 90 days.

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

Exsitec Holding AB  vs.  Peab AB

Exsitec Holding AB

Risk-Adjusted Performance

Good

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

Peab AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Exsitec Holding and Peab AB

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

The idea behind Exsitec Holding AB and Peab 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.

Check out your portfolio center.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.