Correlation Between Orrn Energy and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Orrn Energy 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 Orrn Energy and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orrn Energy AB and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Orrn Energy 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 Orrn Energy with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orrn Energy and Svenska Handelsbanken.
Diversification Opportunities for Orrn Energy and Svenska Handelsbanken
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orrn and Svenska is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Orrn Energy AB and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Orrn Energy 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 Orrn Energy AB 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 Orrn Energy i.e., Orrn Energy and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Orrn Energy and Svenska Handelsbanken
Assuming the 90 days trading horizon Orrn Energy AB is expected to under-perform the Svenska Handelsbanken. But the stock apears to be less risky and, when comparing its historical volatility, Orrn Energy AB is 1.05 times less risky than Svenska Handelsbanken. The stock trades about -0.43 of its potential returns per unit of risk. The Svenska Handelsbanken AB is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 19,270 in Svenska Handelsbanken AB on December 26, 2024 and sell it today you would lose (830.00) from holding Svenska Handelsbanken AB or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orrn Energy AB vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Orrn Energy AB |
| Svenska Handelsbanken |
Orrn Energy and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orrn Energy and Svenska Handelsbanken
The main advantage of trading using opposite Orrn Energy and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orrn Energy 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.| Orrn Energy vs. Samhllsbyggnadsbolaget i Norden | Orrn Energy vs. Sinch AB | Orrn Energy vs. Hexatronic Group AB | Orrn Energy vs. SSAB AB |
| Svenska Handelsbanken vs. Svenska Handelsbanken AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Atlas Copco AB | Svenska Handelsbanken vs. Skandinaviska Enskilda Banken |
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.
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