Correlation Between Creades AB and Svolder AB
Can any of the company-specific risk be diversified away by investing in both Creades AB and Svolder 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 Creades AB and Svolder AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creades AB and Svolder AB, you can compare the effects of market volatilities on Creades AB and Svolder 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 Creades AB with a short position of Svolder AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creades AB and Svolder AB.
Diversification Opportunities for Creades AB and Svolder AB
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Creades and Svolder is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Creades AB and Svolder AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svolder AB and Creades 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 Creades AB are associated (or correlated) with Svolder AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svolder AB has no effect on the direction of Creades AB i.e., Creades AB and Svolder AB go up and down completely randomly.
Pair Corralation between Creades AB and Svolder AB
Assuming the 90 days trading horizon Creades AB is expected to generate 0.95 times more return on investment than Svolder AB. However, Creades AB is 1.05 times less risky than Svolder AB. It trades about 0.13 of its potential returns per unit of risk. Svolder AB is currently generating about -0.15 per unit of risk. If you would invest 6,990 in Creades AB on September 13, 2024 and sell it today you would earn a total of 360.00 from holding Creades AB or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creades AB vs. Svolder AB
Performance |
| Timeline |
| Creades AB |
| Svolder AB |
Creades AB and Svolder AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creades AB and Svolder AB
The main advantage of trading using opposite Creades AB and Svolder AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creades AB position performs unexpectedly, Svolder 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 Svolder AB will offset losses from the drop in Svolder AB's long position.| Creades AB vs. Investment AB Latour | Creades AB vs. Bure Equity AB | Creades AB vs. Svolder AB | Creades AB vs. Kinnevik Investment AB |
| Svolder AB vs. Svolder AB | Svolder AB vs. Creades AB | Svolder AB vs. Kinnevik Investment AB | Svolder AB vs. Systemair 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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