Correlation Between Swedencare Publ and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Swedencare Publ and Svenska Handelsbanken 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 Swedencare Publ and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedencare publ AB and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Swedencare Publ and Svenska Handelsbanken 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 Swedencare Publ with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedencare Publ and Svenska Handelsbanken.
Diversification Opportunities for Swedencare Publ and Svenska Handelsbanken
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swedencare and Svenska is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Swedencare publ AB and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Swedencare Publ 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 Swedencare publ AB are associated (or correlated) with Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Swedencare Publ i.e., Swedencare Publ and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Swedencare Publ and Svenska Handelsbanken
Assuming the 90 days trading horizon Swedencare publ AB is expected to generate 1.52 times more return on investment than Svenska Handelsbanken. However, Swedencare Publ is 1.52 times more volatile than Svenska Handelsbanken AB. It trades about 0.14 of its potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.12 per unit of risk. If you would invest 4,188 in Swedencare publ AB on September 3, 2024 and sell it today you would earn a total of 772.00 from holding Swedencare publ AB or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedencare publ AB vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Swedencare publ AB |
| Svenska Handelsbanken |
Swedencare Publ and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedencare Publ and Svenska Handelsbanken
The main advantage of trading using opposite Swedencare Publ and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedencare Publ position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.| Swedencare Publ vs. Svenska Handelsbanken AB | Swedencare Publ vs. Soder Sportfiske AB | Swedencare Publ vs. Nexam Chemical Holding | Swedencare Publ vs. SaveLend Group AB |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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