Correlation Between Boliden AB and SBB-B
Can any of the company-specific risk be diversified away by investing in both Boliden AB and SBB-B 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 Boliden AB and SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Boliden AB and SBB-B 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 Boliden AB with a short position of SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and SBB-B.
Diversification Opportunities for Boliden AB and SBB-B
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boliden and SBB-B is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget and Boliden AB 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 Boliden AB are associated (or correlated) with SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Boliden AB i.e., Boliden AB and SBB-B go up and down completely randomly.
Pair Corralation between Boliden AB and SBB-B
Assuming the 90 days trading horizon Boliden AB is expected to under-perform the SBB-B. But the stock apears to be less risky and, when comparing its historical volatility, Boliden AB is 2.25 times less risky than SBB-B. The stock trades about -0.03 of its potential returns per unit of risk. The Samhllsbyggnadsbolaget i Norden is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 455.00 in Samhllsbyggnadsbolaget i Norden on September 3, 2024 and sell it today you would lose (69.00) from holding Samhllsbyggnadsbolaget i Norden or give up 15.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Boliden AB |
| Samhllsbyggnadsbolaget |
Boliden AB and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and SBB-B
The main advantage of trading using opposite Boliden AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.| Boliden AB vs. Auriant Mining AB | Boliden AB vs. aXichem AB | Boliden AB vs. Clean Motion AB | Boliden AB vs. KABE Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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