Correlation Between Alpha Bank and Swedbank
Can any of the company-specific risk be diversified away by investing in both Alpha Bank and Swedbank 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 Alpha Bank and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Bank SA and Swedbank AB, you can compare the effects of market volatilities on Alpha Bank and Swedbank 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 Alpha Bank with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Bank and Swedbank.
Diversification Opportunities for Alpha Bank and Swedbank
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpha and Swedbank is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Bank SA and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and Alpha Bank 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 Alpha Bank SA are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Alpha Bank i.e., Alpha Bank and Swedbank go up and down completely randomly.
Pair Corralation between Alpha Bank and Swedbank
Assuming the 90 days horizon Alpha Bank SA is expected to generate 2.59 times more return on investment than Swedbank. However, Alpha Bank is 2.59 times more volatile than Swedbank AB. It trades about 0.04 of its potential returns per unit of risk. Swedbank AB is currently generating about 0.04 per unit of risk. If you would invest 24.00 in Alpha Bank SA on August 26, 2024 and sell it today you would earn a total of 14.00 from holding Alpha Bank SA or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alpha Bank SA vs. Swedbank AB
Performance |
| Timeline |
| Alpha Bank SA |
| Swedbank AB |
Alpha Bank and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Bank and Swedbank
The main advantage of trading using opposite Alpha Bank and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Bank position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
| Swedbank vs. United Overseas Bank | Swedbank vs. KBC Groep NV | Swedbank vs. Jyske Bank AS | Swedbank vs. Israel Discount Bank |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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