Correlation Between Saab AB and SBB-B
Can any of the company-specific risk be diversified away by investing in both Saab AB and SBB-B 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 Saab AB and SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saab AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Saab AB and SBB-B 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 Saab AB with a short position of SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saab AB and SBB-B.
Diversification Opportunities for Saab AB and SBB-B
Excellent diversification
The 3 months correlation between Saab and SBB-B is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Saab AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget and Saab AB 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 Saab AB are associated (or correlated) with SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Saab AB i.e., Saab AB and SBB-B go up and down completely randomly.
Pair Corralation between Saab AB and SBB-B
Assuming the 90 days trading horizon Saab AB is expected to generate 0.62 times more return on investment than SBB-B. However, Saab AB is 1.62 times less risky than SBB-B. It trades about 0.0 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.01 per unit of risk. If you would invest 24,802 in Saab AB on September 3, 2024 and sell it today you would lose (917.00) from holding Saab AB or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saab AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Saab AB |
| Samhllsbyggnadsbolaget |
Saab AB and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saab AB and SBB-B
The main advantage of trading using opposite Saab AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saab AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.| Saab AB vs. SSAB AB | Saab AB vs. Boliden AB | Saab AB vs. Sandvik AB | Saab AB vs. Telefonaktiebolaget LM Ericsson |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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