Correlation Between BillerudKorsnas and SSAB AB
Can any of the company-specific risk be diversified away by investing in both BillerudKorsnas and SSAB AB 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 SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BillerudKorsnas AB and SSAB AB, you can compare the effects of market volatilities on BillerudKorsnas and SSAB AB 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 SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BillerudKorsnas and SSAB AB.
Diversification Opportunities for BillerudKorsnas and SSAB AB
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BillerudKorsnas and SSAB is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BillerudKorsnas AB and SSAB AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB 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 SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB has no effect on the direction of BillerudKorsnas i.e., BillerudKorsnas and SSAB AB go up and down completely randomly.
Pair Corralation between BillerudKorsnas and SSAB AB
Assuming the 90 days trading horizon BillerudKorsnas AB is expected to under-perform the SSAB AB. But the stock apears to be less risky and, when comparing its historical volatility, BillerudKorsnas AB is 1.0 times less risky than SSAB AB. The stock trades about -0.01 of its potential returns per unit of risk. The SSAB AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,369 in SSAB AB on September 12, 2024 and sell it today you would earn a total of 719.00 from holding SSAB AB or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BillerudKorsnas AB vs. SSAB AB
Performance |
| Timeline |
| BillerudKorsnas AB |
| SSAB AB |
BillerudKorsnas and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BillerudKorsnas and SSAB AB
The main advantage of trading using opposite BillerudKorsnas and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BillerudKorsnas position performs unexpectedly, SSAB AB 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 SSAB AB will offset losses from the drop in SSAB AB's long position.| BillerudKorsnas vs. SSAB AB | BillerudKorsnas vs. Svenska Cellulosa Aktiebolaget | BillerudKorsnas vs. Axfood AB | BillerudKorsnas vs. Proact IT Group |
| SSAB AB vs. Boliden AB | SSAB AB vs. SSAB AB | SSAB AB vs. Tele2 AB | SSAB AB vs. Samhllsbyggnadsbolaget i Norden |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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