Correlation Between Svenska Cellulosa and Maven Wireless
Can any of the company-specific risk be diversified away by investing in both Svenska Cellulosa and Maven Wireless 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 Svenska Cellulosa and Maven Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Cellulosa Aktiebolaget and Maven Wireless Sweden, you can compare the effects of market volatilities on Svenska Cellulosa and Maven Wireless 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 Svenska Cellulosa with a short position of Maven Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Cellulosa and Maven Wireless.
Diversification Opportunities for Svenska Cellulosa and Maven Wireless
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Svenska and Maven is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Cellulosa Aktiebolaget and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden and Svenska Cellulosa 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 Svenska Cellulosa Aktiebolaget are associated (or correlated) with Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of Svenska Cellulosa i.e., Svenska Cellulosa and Maven Wireless go up and down completely randomly.
Pair Corralation between Svenska Cellulosa and Maven Wireless
Assuming the 90 days trading horizon Svenska Cellulosa Aktiebolaget is expected to generate 0.57 times more return on investment than Maven Wireless. However, Svenska Cellulosa Aktiebolaget is 1.75 times less risky than Maven Wireless. It trades about 0.02 of its potential returns per unit of risk. Maven Wireless Sweden is currently generating about -0.02 per unit of risk. If you would invest 13,190 in Svenska Cellulosa Aktiebolaget on September 14, 2024 and sell it today you would earn a total of 990.00 from holding Svenska Cellulosa Aktiebolaget or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Cellulosa Aktiebolaget vs. Maven Wireless Sweden
Performance |
| Timeline |
| Svenska Cellulosa |
| Maven Wireless Sweden |
Svenska Cellulosa and Maven Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Cellulosa and Maven Wireless
The main advantage of trading using opposite Svenska Cellulosa and Maven Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Cellulosa position performs unexpectedly, Maven Wireless 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 Maven Wireless will offset losses from the drop in Maven Wireless' long position.| Svenska Cellulosa vs. Svenska Cellulosa Aktiebolaget | Svenska Cellulosa vs. Holmen AB | Svenska Cellulosa vs. Industrivarden AB ser | Svenska Cellulosa vs. Stora Enso Oyj |
| Maven Wireless vs. Checkin Group AB | Maven Wireless vs. Midsummer AB | Maven Wireless vs. Hexatronic Group AB | Maven Wireless vs. Cint 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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