Correlation Between ANZ Group and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both ANZ Group 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 ANZ Group and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANZ Group Holdings and Svenska Handelsbanken AB, you can compare the effects of market volatilities on ANZ Group 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 ANZ Group with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Svenska Handelsbanken.
Diversification Opportunities for ANZ Group and Svenska Handelsbanken
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANZ and Svenska is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and ANZ Group 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 ANZ Group Holdings 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 ANZ Group i.e., ANZ Group and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between ANZ Group and Svenska Handelsbanken
Assuming the 90 days horizon ANZ Group Holdings is expected to generate 0.61 times more return on investment than Svenska Handelsbanken. However, ANZ Group Holdings is 1.64 times less risky than Svenska Handelsbanken. It trades about 0.09 of its potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.03 per unit of risk. If you would invest 1,834 in ANZ Group Holdings on August 24, 2024 and sell it today you would earn a total of 263.00 from holding ANZ Group Holdings or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANZ Group Holdings vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| ANZ Group Holdings |
| Svenska Handelsbanken |
ANZ Group and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANZ Group and Svenska Handelsbanken
The main advantage of trading using opposite ANZ Group and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group 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.| ANZ Group vs. JPMorgan Chase Co | ANZ Group vs. JPMorgan Chase Co | ANZ Group vs. Bank of America | ANZ Group vs. Destiny Tech100 |
| Svenska Handelsbanken vs. Svenska Handelsbanken PK | Svenska Handelsbanken vs. ANZ Group Holdings | Svenska Handelsbanken vs. Westpac Banking | Svenska Handelsbanken vs. National Australia 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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