Correlation Between FormPipe Software and Swedbank
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Swedbank 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 FormPipe Software and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormPipe Software AB and Swedbank AB, you can compare the effects of market volatilities on FormPipe Software and Swedbank 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 FormPipe Software with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Swedbank.
Diversification Opportunities for FormPipe Software and Swedbank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FormPipe and Swedbank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and FormPipe Software 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 FormPipe Software AB are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of FormPipe Software i.e., FormPipe Software and Swedbank go up and down completely randomly.
Pair Corralation between FormPipe Software and Swedbank
Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 1.62 times more return on investment than Swedbank. However, FormPipe Software is 1.62 times more volatile than Swedbank AB. It trades about -0.07 of its potential returns per unit of risk. Swedbank AB is currently generating about -0.17 per unit of risk. If you would invest 2,584 in FormPipe Software AB on August 29, 2024 and sell it today you would lose (74.00) from holding FormPipe Software AB or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Swedbank AB
Performance |
| Timeline |
| FormPipe Software |
| Swedbank AB |
FormPipe Software and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Swedbank
The main advantage of trading using opposite FormPipe Software and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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