Correlation Between Societe Generale and Swedbank
Can any of the company-specific risk be diversified away by investing in both Societe Generale and Swedbank 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 Societe Generale and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale ADR and Swedbank AB, you can compare the effects of market volatilities on Societe Generale and Swedbank 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 Societe Generale with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and Swedbank.
Diversification Opportunities for Societe Generale and Swedbank
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Societe and Swedbank is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale ADR and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and Societe Generale 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 Societe Generale ADR are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Societe Generale i.e., Societe Generale and Swedbank go up and down completely randomly.
Pair Corralation between Societe Generale and Swedbank
Assuming the 90 days horizon Societe Generale ADR is expected to generate 1.87 times more return on investment than Swedbank. However, Societe Generale is 1.87 times more volatile than Swedbank AB. It trades about 0.13 of its potential returns per unit of risk. Swedbank AB is currently generating about -0.15 per unit of risk. If you would invest 520.00 in Societe Generale ADR on August 24, 2024 and sell it today you would earn a total of 39.00 from holding Societe Generale ADR or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Societe Generale ADR vs. Swedbank AB
Performance |
| Timeline |
| Societe Generale ADR |
| Swedbank AB |
Societe Generale and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe Generale and Swedbank
The main advantage of trading using opposite Societe Generale and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| Societe Generale vs. Pioneer Floating Rate | Societe Generale vs. The Gabelli Equity | Societe Generale vs. Pioneer Municipal High | Societe Generale vs. Nuveen Global High |
| Swedbank vs. Pioneer Floating Rate | Swedbank vs. The Gabelli Equity | Swedbank vs. Pioneer Municipal High | Swedbank vs. Nuveen Global High |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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