Correlation Between Embellence Group and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Embellence Group 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 Embellence Group and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embellence Group AB and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Embellence Group 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 Embellence Group with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embellence Group and Svenska Handelsbanken.
Diversification Opportunities for Embellence Group and Svenska Handelsbanken
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Embellence and Svenska is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Embellence Group 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 Embellence 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 Embellence Group 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 Embellence Group i.e., Embellence Group and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Embellence Group and Svenska Handelsbanken
Assuming the 90 days trading horizon Embellence Group is expected to generate 9.77 times less return on investment than Svenska Handelsbanken. In addition to that, Embellence Group is 2.13 times more volatile than Svenska Handelsbanken AB. It trades about 0.02 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.34 per unit of volatility. If you would invest 12,135 in Svenska Handelsbanken AB on November 18, 2024 and sell it today you would earn a total of 870.00 from holding Svenska Handelsbanken AB or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embellence Group AB vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Embellence Group |
| Svenska Handelsbanken |
Embellence Group and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embellence Group and Svenska Handelsbanken
The main advantage of trading using opposite Embellence Group and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embellence Group 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.| Embellence Group vs. Rugvista Group AB | Embellence Group vs. Nimbus Group AB | Embellence Group vs. Desenio Group AB | Embellence Group vs. Idun Industrier 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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