Correlation Between DBS Group and Swedbank
Can any of the company-specific risk be diversified away by investing in both DBS Group and Swedbank 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 DBS Group and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBS Group Holdings and Swedbank AB, you can compare the effects of market volatilities on DBS Group and Swedbank 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 DBS Group with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and Swedbank.
Diversification Opportunities for DBS Group and Swedbank
Excellent diversification
The 3 months correlation between DBS and Swedbank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and DBS Group 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 DBS Group Holdings are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of DBS Group i.e., DBS Group and Swedbank go up and down completely randomly.
Pair Corralation between DBS Group and Swedbank
Assuming the 90 days horizon DBS Group Holdings is expected to generate 0.63 times more return on investment than Swedbank. However, DBS Group Holdings is 1.59 times less risky than Swedbank. It trades about 0.08 of its potential returns per unit of risk. Swedbank AB is currently generating about 0.04 per unit of risk. If you would invest 8,086 in DBS Group Holdings on August 26, 2024 and sell it today you would earn a total of 4,411 from holding DBS Group Holdings or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
DBS Group Holdings vs. Swedbank AB
Performance |
| Timeline |
| DBS Group Holdings |
| Swedbank AB |
DBS Group and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBS Group and Swedbank
The main advantage of trading using opposite DBS Group and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
| Swedbank vs. United Overseas Bank | Swedbank vs. KBC Groep NV | Swedbank vs. Jyske Bank AS | Swedbank vs. Israel Discount Bank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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