Correlation Between OMX Stockholm and Avanza Bank
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By analyzing existing cross correlation between OMX Stockholm Mid and Avanza Bank Holding, you can compare the effects of market volatilities on OMX Stockholm 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 OMX Stockholm with a short position of Avanza Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Avanza Bank.
Diversification Opportunities for OMX Stockholm and Avanza Bank
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OMX and Avanza is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid 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 OMX Stockholm 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 OMX Stockholm Mid 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 OMX Stockholm i.e., OMX Stockholm and Avanza Bank go up and down completely randomly.
Pair Corralation between OMX Stockholm and Avanza Bank
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to under-perform the Avanza Bank. But the index apears to be less risky and, when comparing its historical volatility, OMX Stockholm Mid is 1.47 times less risky than Avanza Bank. The index trades about -0.11 of its potential returns per unit of risk. The Avanza Bank Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 22,180 in Avanza Bank Holding on August 31, 2024 and sell it today you would earn a total of 400.00 from holding Avanza Bank Holding or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Avanza Bank Holding
Performance |
| Timeline |
OMX Stockholm and Avanza Bank Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Avanza Bank Holding
Pair trading matchups for Avanza Bank
Pair Trading with OMX Stockholm and Avanza Bank
The main advantage of trading using opposite OMX Stockholm and Avanza Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm 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.| OMX Stockholm vs. SaveLend Group AB | OMX Stockholm vs. Skandinaviska Enskilda Banken | OMX Stockholm vs. Havsfrun Investment AB | OMX Stockholm vs. New Nordic Healthbrands |
| Avanza Bank vs. Axfood AB | Avanza Bank vs. Samhllsbyggnadsbolaget i Norden | Avanza Bank vs. Castellum AB | Avanza Bank vs. Investor AB ser |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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