Correlation Between American Funds and Swedencare Publ
Can any of the company-specific risk be diversified away by investing in both American Funds and Swedencare Publ 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 American Funds and Swedencare Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Swedencare publ AB, you can compare the effects of market volatilities on American Funds and Swedencare Publ 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 American Funds with a short position of Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Swedencare Publ.
Diversification Opportunities for American Funds and Swedencare Publ
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Swedencare is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare publ AB and American Funds 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 American Funds Fundamental are associated (or correlated) with Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of American Funds i.e., American Funds and Swedencare Publ go up and down completely randomly.
Pair Corralation between American Funds and Swedencare Publ
Assuming the 90 days horizon American Funds is expected to generate 1.12 times less return on investment than Swedencare Publ. But when comparing it to its historical volatility, American Funds Fundamental is 2.51 times less risky than Swedencare Publ. It trades about 0.2 of its potential returns per unit of risk. Swedencare publ AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,820 in Swedencare publ AB on November 3, 2024 and sell it today you would earn a total of 200.00 from holding Swedencare publ AB or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Funds Fundamental vs. Swedencare publ AB
Performance |
| Timeline |
| American Funds Funda |
| Swedencare publ AB |
American Funds and Swedencare Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Swedencare Publ
The main advantage of trading using opposite American Funds and Swedencare Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Swedencare Publ 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 Swedencare Publ will offset losses from the drop in Swedencare Publ's long position.| American Funds vs. World Energy Fund | American Funds vs. Energy Services Fund | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Icon Natural Resources |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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