Correlation Between Investment and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Investment 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 Investment and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment AB Oresund and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Investment 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 Investment with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Svenska Handelsbanken.
Diversification Opportunities for Investment and Svenska Handelsbanken
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investment and Svenska is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Investment 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 Investment AB Oresund 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 Investment i.e., Investment and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Investment and Svenska Handelsbanken
Assuming the 90 days trading horizon Investment AB Oresund is expected to under-perform the Svenska Handelsbanken. In addition to that, Investment is 1.17 times more volatile than Svenska Handelsbanken AB. It trades about -0.17 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.06 per unit of volatility. If you would invest 14,650 in Svenska Handelsbanken AB on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Svenska Handelsbanken AB or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment AB Oresund vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Investment AB Oresund |
| Svenska Handelsbanken |
Investment and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Svenska Handelsbanken
The main advantage of trading using opposite Investment and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment 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.| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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