Correlation Between L E and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both L E 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 L E and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L E Lundbergfretagen and Svenska Handelsbanken AB, you can compare the effects of market volatilities on L E 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 L E with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of L E and Svenska Handelsbanken.
Diversification Opportunities for L E and Svenska Handelsbanken
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LUND-B and Svenska is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding L E Lundbergfretagen and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and L E 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 L E Lundbergfretagen 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 L E i.e., L E and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between L E and Svenska Handelsbanken
Assuming the 90 days trading horizon L E Lundbergfretagen is expected to under-perform the Svenska Handelsbanken. In addition to that, L E is 1.31 times more volatile than Svenska Handelsbanken AB. It trades about -0.11 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about -0.08 per unit of volatility. If you would invest 11,240 in Svenska Handelsbanken AB on August 27, 2024 and sell it today you would lose (160.00) from holding Svenska Handelsbanken AB or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
L E Lundbergfretagen vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| L E Lundbergfretagen |
| Svenska Handelsbanken |
L E and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L E and Svenska Handelsbanken
The main advantage of trading using opposite L E and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L E 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.| L E vs. Norva24 Group AB | L E vs. KABE Group AB | L E vs. IAR Systems Group | L E vs. Clinical Laserthermia Systems |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |