Correlation Between Brilliant Future and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Brilliant Future 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 Brilliant Future and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brilliant Future AB and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Brilliant Future 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 Brilliant Future with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brilliant Future and Svenska Handelsbanken.
Diversification Opportunities for Brilliant Future and Svenska Handelsbanken
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brilliant and Svenska is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Brilliant Future AB and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Brilliant Future 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 Brilliant Future AB 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 Brilliant Future i.e., Brilliant Future and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Brilliant Future and Svenska Handelsbanken
Assuming the 90 days trading horizon Brilliant Future AB is expected to under-perform the Svenska Handelsbanken. In addition to that, Brilliant Future is 1.86 times more volatile than Svenska Handelsbanken AB. It trades about -0.22 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about -0.02 per unit of volatility. If you would invest 11,230 in Svenska Handelsbanken AB on August 30, 2024 and sell it today you would lose (50.00) from holding Svenska Handelsbanken AB or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Brilliant Future AB vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Brilliant Future |
| Svenska Handelsbanken |
Brilliant Future and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brilliant Future and Svenska Handelsbanken
The main advantage of trading using opposite Brilliant Future and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brilliant Future 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.| Brilliant Future vs. Ekobot AB | Brilliant Future vs. Ayima Group AB | Brilliant Future vs. JonDeTech Sensors | Brilliant Future vs. Clean Motion AB |
| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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