Correlation Between EQT AB and Avanza Bank
Can any of the company-specific risk be diversified away by investing in both EQT AB and Avanza Bank 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 EQT AB and Avanza Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQT AB and Avanza Bank Holding, you can compare the effects of market volatilities on EQT AB and Avanza Bank 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 EQT AB with a short position of Avanza Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQT AB and Avanza Bank.
Diversification Opportunities for EQT AB and Avanza Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EQT and Avanza is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding EQT AB and Avanza Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanza Bank Holding and EQT 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 EQT AB are associated (or correlated) with Avanza Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanza Bank Holding has no effect on the direction of EQT AB i.e., EQT AB and Avanza Bank go up and down completely randomly.
Pair Corralation between EQT AB and Avanza Bank
Assuming the 90 days trading horizon EQT AB is expected to generate 1.17 times more return on investment than Avanza Bank. However, EQT AB is 1.17 times more volatile than Avanza Bank Holding. It trades about 0.03 of its potential returns per unit of risk. Avanza Bank Holding is currently generating about 0.02 per unit of risk. If you would invest 23,732 in EQT AB on August 24, 2024 and sell it today you would earn a total of 6,978 from holding EQT AB or generate 29.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EQT AB vs. Avanza Bank Holding
Performance |
| Timeline |
| EQT AB |
| Avanza Bank Holding |
EQT AB and Avanza Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQT AB and Avanza Bank
The main advantage of trading using opposite EQT AB and Avanza Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQT AB position performs unexpectedly, Avanza Bank 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 Avanza Bank will offset losses from the drop in Avanza Bank's long position.| EQT AB vs. Investor AB ser | EQT AB vs. Kinnevik Investment AB | EQT AB vs. Samhllsbyggnadsbolaget i Norden | EQT AB vs. Investment AB Latour |
| Avanza Bank vs. Nordea Bank Abp | Avanza Bank vs. Skandinaviska Enskilda Banken | Avanza Bank vs. Skandinaviska Enskilda Banken | Avanza Bank vs. Swedbank 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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