Correlation Between SBB-B and Midsona AB
Can any of the company-specific risk be diversified away by investing in both SBB-B and Midsona 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 SBB-B and Midsona AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhllsbyggnadsbolaget i Norden and Midsona AB, you can compare the effects of market volatilities on SBB-B and Midsona 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 Midsona AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Midsona AB.
Diversification Opportunities for SBB-B and Midsona AB
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBB-B and Midsona is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Midsona AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midsona 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 Midsona AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midsona AB has no effect on the direction of SBB-B i.e., SBB-B and Midsona AB go up and down completely randomly.
Pair Corralation between SBB-B and Midsona AB
Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to under-perform the Midsona AB. In addition to that, SBB-B is 1.67 times more volatile than Midsona AB. It trades about -0.37 of its total potential returns per unit of risk. Midsona AB is currently generating about -0.04 per unit of volatility. If you would invest 912.00 in Midsona AB on August 25, 2024 and sell it today you would lose (52.00) from holding Midsona AB or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhllsbyggnadsbolaget i Norde vs. Midsona AB
Performance |
| Timeline |
| Samhllsbyggnadsbolaget |
| Midsona AB |
SBB-B and Midsona AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBB-B and Midsona AB
The main advantage of trading using opposite SBB-B and Midsona AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-B position performs unexpectedly, Midsona 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 Midsona AB will offset losses from the drop in Midsona 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 |
| Midsona AB vs. Samhllsbyggnadsbolaget i Norden | Midsona AB vs. Media and Games | Midsona AB vs. Hexatronic Group AB | Midsona AB vs. Sinch AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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