Correlation Between Realfiction Holding and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Realfiction Holding and SSAB AB 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 Realfiction Holding and SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realfiction Holding AB and SSAB AB, you can compare the effects of market volatilities on Realfiction Holding and SSAB 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 Realfiction Holding with a short position of SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realfiction Holding and SSAB AB.
Diversification Opportunities for Realfiction Holding and SSAB AB
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Realfiction and SSAB is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Realfiction Holding AB and SSAB AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB and Realfiction Holding 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 Realfiction Holding AB are associated (or correlated) with SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB has no effect on the direction of Realfiction Holding i.e., Realfiction Holding and SSAB AB go up and down completely randomly.
Pair Corralation between Realfiction Holding and SSAB AB
Assuming the 90 days trading horizon Realfiction Holding AB is expected to generate 2.29 times more return on investment than SSAB AB. However, Realfiction Holding is 2.29 times more volatile than SSAB AB. It trades about -0.01 of its potential returns per unit of risk. SSAB AB is currently generating about -0.06 per unit of risk. If you would invest 1,472 in Realfiction Holding AB on October 26, 2024 and sell it today you would lose (226.00) from holding Realfiction Holding AB or give up 15.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Realfiction Holding AB vs. SSAB AB
Performance |
| Timeline |
| Realfiction Holding |
| SSAB AB |
Realfiction Holding and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realfiction Holding and SSAB AB
The main advantage of trading using opposite Realfiction Holding and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realfiction Holding position performs unexpectedly, SSAB 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 SSAB AB will offset losses from the drop in SSAB AB's long position.| Realfiction Holding vs. Sivers IMA Holding | Realfiction Holding vs. AAC Clyde Space | Realfiction Holding vs. Kancera AB | Realfiction Holding vs. Bambuser AB |
| SSAB AB vs. Boliden AB | SSAB AB vs. SSAB AB | SSAB AB vs. Tele2 AB | SSAB AB vs. Samhllsbyggnadsbolaget i Norden |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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