Correlation Between SBB-B and Sinch AB
Can any of the company-specific risk be diversified away by investing in both SBB-B and Sinch 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 Sinch 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 Sinch AB, you can compare the effects of market volatilities on SBB-B and Sinch 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 Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Sinch AB.
Diversification Opportunities for SBB-B and Sinch AB
Poor diversification
The 3 months correlation between SBB-B and Sinch is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch 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 Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of SBB-B i.e., SBB-B and Sinch AB go up and down completely randomly.
Pair Corralation between SBB-B and Sinch AB
Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to generate 1.33 times more return on investment than Sinch AB. However, SBB-B is 1.33 times more volatile than Sinch AB. It trades about 0.0 of its potential returns per unit of risk. Sinch AB is currently generating about -0.11 per unit of risk. If you would invest 589.00 in Samhllsbyggnadsbolaget i Norden on October 26, 2024 and sell it today you would lose (61.00) from holding Samhllsbyggnadsbolaget i Norden or give up 10.36% 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. Sinch AB
Performance |
| Timeline |
| Samhllsbyggnadsbolaget |
| Sinch AB |
SBB-B and Sinch AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBB-B and Sinch AB
The main advantage of trading using opposite SBB-B and Sinch AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-B position performs unexpectedly, Sinch 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 Sinch AB will offset losses from the drop in Sinch AB's long position.The idea behind Samhllsbyggnadsbolaget i Norden and Sinch AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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