Correlation Between Svenska Cellulosa and Boliden AB
Can any of the company-specific risk be diversified away by investing in both Svenska Cellulosa and Boliden 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 Svenska Cellulosa and Boliden AB 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 Boliden AB, you can compare the effects of market volatilities on Svenska Cellulosa and Boliden 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 Svenska Cellulosa with a short position of Boliden AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Cellulosa and Boliden AB.
Diversification Opportunities for Svenska Cellulosa and Boliden AB
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Svenska and Boliden is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Cellulosa Aktiebolaget and Boliden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boliden AB 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 Boliden AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boliden AB has no effect on the direction of Svenska Cellulosa i.e., Svenska Cellulosa and Boliden AB go up and down completely randomly.
Pair Corralation between Svenska Cellulosa and Boliden AB
Assuming the 90 days trading horizon Svenska Cellulosa Aktiebolaget is expected to generate 0.54 times more return on investment than Boliden AB. However, Svenska Cellulosa Aktiebolaget is 1.86 times less risky than Boliden AB. It trades about -0.01 of its potential returns per unit of risk. Boliden AB is currently generating about -0.05 per unit of risk. If you would invest 14,570 in Svenska Cellulosa Aktiebolaget on August 28, 2024 and sell it today you would lose (40.00) from holding Svenska Cellulosa Aktiebolaget or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Cellulosa Aktiebolaget vs. Boliden AB
Performance |
| Timeline |
| Svenska Cellulosa |
| Boliden AB |
Svenska Cellulosa and Boliden AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Cellulosa and Boliden AB
The main advantage of trading using opposite Svenska Cellulosa and Boliden AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Cellulosa position performs unexpectedly, Boliden 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 Boliden AB will offset losses from the drop in Boliden AB's long position.| Svenska Cellulosa vs. Essity AB | Svenska Cellulosa vs. AB SKF | Svenska Cellulosa vs. Skanska AB | Svenska Cellulosa vs. Sandvik AB |
| Boliden AB vs. Svenska Aerogel Holding | Boliden AB vs. Kancera AB | Boliden AB vs. BIMobject AB | Boliden AB vs. KABE 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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