Correlation Between BillerudKorsnas and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both BillerudKorsnas and Svenska Cellulosa 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 BillerudKorsnas and Svenska Cellulosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BillerudKorsnas AB and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on BillerudKorsnas 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 BillerudKorsnas with a short position of Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BillerudKorsnas and Svenska Cellulosa.
Diversification Opportunities for BillerudKorsnas and Svenska Cellulosa
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BillerudKorsnas and Svenska is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding BillerudKorsnas AB and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa and BillerudKorsnas 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 BillerudKorsnas AB 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 BillerudKorsnas i.e., BillerudKorsnas and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between BillerudKorsnas and Svenska Cellulosa
Assuming the 90 days trading horizon BillerudKorsnas AB is expected to generate 1.44 times more return on investment than Svenska Cellulosa. However, BillerudKorsnas is 1.44 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about 0.14 of its potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about -0.01 per unit of risk. If you would invest 9,715 in BillerudKorsnas AB on August 28, 2024 and sell it today you would earn a total of 455.00 from holding BillerudKorsnas AB or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BillerudKorsnas AB vs. Svenska Cellulosa Aktiebolaget
Performance |
| Timeline |
| BillerudKorsnas AB |
| Svenska Cellulosa |
BillerudKorsnas and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BillerudKorsnas and Svenska Cellulosa
The main advantage of trading using opposite BillerudKorsnas and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BillerudKorsnas 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.| BillerudKorsnas vs. Svenska Aerogel Holding | BillerudKorsnas vs. Kancera AB | BillerudKorsnas vs. BIMobject AB | BillerudKorsnas vs. KABE Group AB |
| Svenska Cellulosa vs. Essity AB | Svenska Cellulosa vs. AB SKF | Svenska Cellulosa vs. Skanska AB | Svenska Cellulosa vs. Sandvik 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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