Correlation Between Essity AB and Saab AB
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By analyzing existing cross correlation between Essity AB and Saab AB, you can compare the effects of market volatilities on Essity 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 Essity AB with a short position of Saab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essity AB and Saab AB.
Diversification Opportunities for Essity AB and Saab AB
Average diversification
The 3 months correlation between Essity and Saab is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Essity AB and Saab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saab AB and Essity 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 Essity 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 Essity AB i.e., Essity AB and Saab AB go up and down completely randomly.
Pair Corralation between Essity AB and Saab AB
Assuming the 90 days trading horizon Essity AB is expected to generate 1.99 times less return on investment than Saab AB. But when comparing it to its historical volatility, Essity AB is 2.29 times less risky than Saab AB. It trades about 0.08 of its potential returns per unit of risk. 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essity AB vs. Saab AB
Performance |
| Timeline |
| Essity AB |
| Saab AB |
Essity AB and Saab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essity AB and Saab AB
The main advantage of trading using opposite Essity AB and Saab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essity 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.| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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