Correlation Between AB Sagax and Sdiptech
Can any of the company-specific risk be diversified away by investing in both AB Sagax and Sdiptech 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 AB Sagax and Sdiptech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Sagax and Sdiptech AB, you can compare the effects of market volatilities on AB Sagax and Sdiptech 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 AB Sagax with a short position of Sdiptech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Sagax and Sdiptech.
Diversification Opportunities for AB Sagax and Sdiptech
Average diversification
The 3 months correlation between SAGA-D and Sdiptech is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Sdiptech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdiptech AB and AB Sagax 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 AB Sagax are associated (or correlated) with Sdiptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdiptech AB has no effect on the direction of AB Sagax i.e., AB Sagax and Sdiptech go up and down completely randomly.
Pair Corralation between AB Sagax and Sdiptech
Assuming the 90 days trading horizon AB Sagax is expected to generate 0.32 times more return on investment than Sdiptech. However, AB Sagax is 3.13 times less risky than Sdiptech. It trades about -0.22 of its potential returns per unit of risk. Sdiptech AB is currently generating about -0.21 per unit of risk. If you would invest 3,235 in AB Sagax on August 29, 2024 and sell it today you would lose (105.00) from holding AB Sagax or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Sagax vs. Sdiptech AB
Performance |
| Timeline |
| AB Sagax |
| Sdiptech AB |
AB Sagax and Sdiptech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Sagax and Sdiptech
The main advantage of trading using opposite AB Sagax and Sdiptech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Sagax position performs unexpectedly, Sdiptech 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 Sdiptech will offset losses from the drop in Sdiptech's long position.| AB Sagax vs. AB Sagax | AB Sagax vs. Samhaellsbyggnadsbolaget i Norden | AB Sagax vs. AB Sagax | AB Sagax vs. Fastighets AB Balder |
| Sdiptech vs. AB Sagax | Sdiptech vs. ALM Equity AB | Sdiptech vs. KABE Group AB | Sdiptech vs. IAR Systems Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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