Correlation Between Elekta AB and Saab AB
Can any of the company-specific risk be diversified away by investing in both Elekta AB and Saab 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 Elekta AB and Saab AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elekta AB and Saab AB, you can compare the effects of market volatilities on Elekta AB and Saab 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 Elekta AB with a short position of Saab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elekta AB and Saab AB.
Diversification Opportunities for Elekta AB and Saab AB
Good diversification
The 3 months correlation between Elekta and Saab is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Elekta AB and Saab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saab AB and Elekta 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 Elekta AB are associated (or correlated) with Saab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saab AB has no effect on the direction of Elekta AB i.e., Elekta AB and Saab AB go up and down completely randomly.
Pair Corralation between Elekta AB and Saab AB
Assuming the 90 days trading horizon Elekta AB is expected to under-perform the Saab AB. But the stock apears to be less risky and, when comparing its historical volatility, Elekta AB is 1.23 times less risky than Saab AB. The stock trades about -0.01 of its potential returns per unit of risk. The Saab AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17,163 in Saab AB on November 3, 2024 and sell it today you would earn a total of 6,882 from holding Saab AB or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elekta AB vs. Saab AB
Performance |
| Timeline |
| Elekta AB |
| Saab AB |
Elekta AB and Saab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elekta AB and Saab AB
The main advantage of trading using opposite Elekta AB and Saab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elekta AB position performs unexpectedly, Saab 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 Saab AB will offset losses from the drop in Saab AB's long position.| Elekta AB vs. Getinge AB ser | Elekta AB vs. AB SKF | Elekta AB vs. ASSA ABLOY AB | Elekta AB vs. Husqvarna AB |
| Saab AB vs. SSAB AB | Saab AB vs. Boliden AB | Saab AB vs. Sandvik AB | Saab AB vs. Telefonaktiebolaget LM Ericsson |
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 CEOs Directory module to screen CEOs from public companies around the world.
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