Correlation Between Fast Ejendom and Wells Fargo

By analyzing existing cross correlation between Fast Ejendom Danmark and Wells Fargo you can compare the effects of market volatilities on Fast Ejendom and Wells Fargo 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 Fast Ejendom with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Ejendom and Wells Fargo.

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Can any of the company-specific risk be diversified away by investing in both Fast Ejendom and Wells Fargo at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Fast Ejendom and Wells Fargo into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for Fast Ejendom and Wells Fargo

0.74
Correlation
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Poor diversification

The 3 months correlation between Fast Ejendom and Wells is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fast Ejendom Danmark AS and Wells Fargo Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo and Fast Ejendom 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 Fast Ejendom Danmark are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo has no effect on the direction of Fast Ejendom i.e. Fast Ejendom and Wells Fargo go up and down completely randomly.

Pair Corralation between Fast Ejendom and Wells Fargo

Assuming 30 trading days horizon, Fast Ejendom Danmark is expected to generate 0.64 times more return on investment than Wells Fargo. However, Fast Ejendom Danmark is 1.57 times less risky than Wells Fargo. It trades about -0.04 of its potential returns per unit of risk. Wells Fargo is currently generating about -0.08 per unit of risk. If you would invest  12,200  in Fast Ejendom Danmark on April 27, 2020 and sell it today you would lose (1,500)  from holding Fast Ejendom Danmark or give up 12.3% of portfolio value over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy82.54%
ValuesDaily Returns

Fast Ejendom Danmark AS  vs.  Wells Fargo Company

 Performance (%) 
      Timeline 
Fast Ejendom Danmark 
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Fast Ejendom Risk-Adjusted Performance

Over the last 30 days Fast Ejendom Danmark has generated negative risk-adjusted returns adding no value to investors with long positions. Allthough latest weak performance, the Stock's forward indicators remain persistent and the existing mess on Wall Street may also be a sign of long standing gains for the corporation partners.
Wells Fargo 
00

Wells Fargo Risk-Adjusted Performance

Over the last 30 days Wells Fargo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2020. The current disturbance may also be a sign of long term up-swing for the company investors.

Fast Ejendom and Wells Fargo Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.


 
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