Correlation Between OMX Stockholm and Essity AB
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By analyzing existing cross correlation between OMX Stockholm Mid and Essity AB, you can compare the effects of market volatilities on OMX Stockholm and Essity 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 OMX Stockholm with a short position of Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Essity AB.
Diversification Opportunities for OMX Stockholm and Essity AB
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OMX and Essity is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB 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 Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Essity AB go up and down completely randomly.
Pair Corralation between OMX Stockholm and Essity AB
Assuming the 90 days trading horizon OMX Stockholm is expected to generate 1.08 times less return on investment than Essity AB. But when comparing it to its historical volatility, OMX Stockholm Mid is 1.39 times less risky than Essity AB. It trades about 0.05 of its potential returns per unit of risk. Essity AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25,130 in Essity AB on August 26, 2024 and sell it today you would earn a total of 5,170 from holding Essity AB or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Essity AB
Performance |
| Timeline |
OMX Stockholm and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Essity AB
Pair trading matchups for Essity AB
Pair Trading with OMX Stockholm and Essity AB
The main advantage of trading using opposite OMX Stockholm and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Essity 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 Essity AB will offset losses from the drop in Essity AB's long position.| OMX Stockholm vs. Havsfrun Investment AB | OMX Stockholm vs. SaltX Technology Holding | OMX Stockholm vs. FormPipe Software AB | OMX Stockholm vs. Investment AB Oresund |
| Essity AB vs. Essity AB | Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. Industrivarden AB ser | Essity AB vs. Svenska Cellulosa Aktiebolaget |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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