Correlation Between Elekta AB and AB SKF
Can any of the company-specific risk be diversified away by investing in both Elekta AB and AB SKF 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 AB SKF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elekta AB and AB SKF, you can compare the effects of market volatilities on Elekta AB and AB SKF 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 AB SKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elekta AB and AB SKF.
Diversification Opportunities for Elekta AB and AB SKF
Good diversification
The 3 months correlation between Elekta and SKF-B is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Elekta AB and AB SKF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB SKF 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 AB SKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SKF has no effect on the direction of Elekta AB i.e., Elekta AB and AB SKF go up and down completely randomly.
Pair Corralation between Elekta AB and AB SKF
Assuming the 90 days trading horizon Elekta AB is expected to under-perform the AB SKF. In addition to that, Elekta AB is 1.34 times more volatile than AB SKF. It trades about -0.01 of its total potential returns per unit of risk. AB SKF is currently generating about 0.04 per unit of volatility. If you would invest 20,208 in AB SKF on November 3, 2024 and sell it today you would earn a total of 2,272 from holding AB SKF or generate 11.24% 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. AB SKF
Performance |
| Timeline |
| Elekta AB |
| AB SKF |
Elekta AB and AB SKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elekta AB and AB SKF
The main advantage of trading using opposite Elekta AB and AB SKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elekta AB position performs unexpectedly, AB SKF 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 AB SKF will offset losses from the drop in AB SKF'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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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