Correlation Between Byggmstare Anders and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Byggmstare Anders and Svenska Handelsbanken 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 Byggmstare Anders and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Byggmstare Anders J and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Byggmstare Anders and Svenska Handelsbanken 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 Byggmstare Anders with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmstare Anders and Svenska Handelsbanken.
Diversification Opportunities for Byggmstare Anders and Svenska Handelsbanken
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Byggmstare and Svenska is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Byggmstare Anders J and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Byggmstare Anders 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 Byggmstare Anders J are associated (or correlated) with Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Byggmstare Anders i.e., Byggmstare Anders and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Byggmstare Anders and Svenska Handelsbanken
Assuming the 90 days trading horizon Byggmstare Anders J is expected to under-perform the Svenska Handelsbanken. In addition to that, Byggmstare Anders is 1.24 times more volatile than Svenska Handelsbanken AB. It trades about -0.22 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.11 per unit of volatility. If you would invest 11,130 in Svenska Handelsbanken AB on August 31, 2024 and sell it today you would earn a total of 250.00 from holding Svenska Handelsbanken AB or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Byggmstare Anders J vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Byggmstare Anders |
| Svenska Handelsbanken |
Byggmstare Anders and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmstare Anders and Svenska Handelsbanken
The main advantage of trading using opposite Byggmstare Anders and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmstare Anders position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.| Byggmstare Anders vs. Creades AB | Byggmstare Anders vs. ALM Equity AB | Byggmstare Anders vs. Brinova Fastigheter AB | Byggmstare Anders vs. Awardit AB |
| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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