Correlation Between Autoliv and Svenska Cellulosa
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By analyzing existing cross correlation between Autoliv and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Autoliv and Svenska Cellulosa 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 Autoliv with a short position of Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Svenska Cellulosa.
Diversification Opportunities for Autoliv and Svenska Cellulosa
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autoliv and Svenska is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa and Autoliv 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 Autoliv are associated (or correlated) with Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Autoliv i.e., Autoliv and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Autoliv and Svenska Cellulosa
Assuming the 90 days trading horizon Autoliv is expected to generate 1.02 times more return on investment than Svenska Cellulosa. However, Autoliv is 1.02 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about 0.02 of its potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about 0.0 per unit of risk. If you would invest 104,148 in Autoliv on August 29, 2024 and sell it today you would earn a total of 4,452 from holding Autoliv or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autoliv vs. Svenska Cellulosa Aktiebolaget
Performance |
| Timeline |
| Autoliv |
| Svenska Cellulosa |
Autoliv and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Svenska Cellulosa
The main advantage of trading using opposite Autoliv and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv position performs unexpectedly, Svenska Cellulosa 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 Cellulosa will offset losses from the drop in Svenska Cellulosa's long position.The idea behind Autoliv and Svenska Cellulosa Aktiebolaget 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.| Svenska Cellulosa vs. Svenska Cellulosa Aktiebolaget | Svenska Cellulosa vs. Holmen AB | Svenska Cellulosa vs. Industrivarden AB ser | Svenska Cellulosa vs. Stora Enso Oyj |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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