Correlation Between SBB-B and Lifco AB
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By analyzing existing cross correlation between Samhllsbyggnadsbolaget i Norden and Lifco AB, you can compare the effects of market volatilities on SBB-B and Lifco 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 SBB-B with a short position of Lifco AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Lifco AB.
Diversification Opportunities for SBB-B and Lifco AB
Poor diversification
The 3 months correlation between SBB-B and Lifco is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Lifco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifco AB and SBB-B 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 Samhllsbyggnadsbolaget i Norden are associated (or correlated) with Lifco AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifco AB has no effect on the direction of SBB-B i.e., SBB-B and Lifco AB go up and down completely randomly.
Pair Corralation between SBB-B and Lifco AB
Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to under-perform the Lifco AB. In addition to that, SBB-B is 2.5 times more volatile than Lifco AB. It trades about -0.38 of its total potential returns per unit of risk. Lifco AB is currently generating about -0.08 per unit of volatility. If you would invest 33,900 in Lifco AB on August 26, 2024 and sell it today you would lose (2,080) from holding Lifco AB or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhllsbyggnadsbolaget i Norde vs. Lifco AB
Performance |
| Timeline |
| Samhllsbyggnadsbolaget |
| Lifco AB |
SBB-B and Lifco AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBB-B and Lifco AB
The main advantage of trading using opposite SBB-B and Lifco AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-B position performs unexpectedly, Lifco 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 Lifco AB will offset losses from the drop in Lifco AB's long position.| SBB-B vs. Hufvudstaden AB | SBB-B vs. Fabege AB | SBB-B vs. Wihlborgs Fastigheter AB | SBB-B vs. Fastighets AB Balder |
| Lifco AB vs. Indutrade AB | Lifco AB vs. Addtech AB | Lifco AB vs. Teqnion AB | Lifco AB vs. Vitec Software 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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