Correlation Between Svenska Handelsbanken and Alcadon Group
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Alcadon Group 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 Handelsbanken and Alcadon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and Alcadon Group AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Alcadon Group 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 Handelsbanken with a short position of Alcadon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Alcadon Group.
Diversification Opportunities for Svenska Handelsbanken and Alcadon Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Svenska and Alcadon is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB and Svenska Handelsbanken 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 Handelsbanken AB are associated (or correlated) with Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Alcadon Group go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Alcadon Group
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.39 times more return on investment than Alcadon Group. However, Svenska Handelsbanken AB is 2.55 times less risky than Alcadon Group. It trades about -0.02 of its potential returns per unit of risk. Alcadon Group AB is currently generating about -0.16 per unit of risk. If you would invest 11,230 in Svenska Handelsbanken AB on August 30, 2024 and sell it today you would lose (50.00) from holding Svenska Handelsbanken AB or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Alcadon Group AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Alcadon Group AB |
Svenska Handelsbanken and Alcadon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Alcadon Group
The main advantage of trading using opposite Svenska Handelsbanken and Alcadon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Alcadon Group 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 Alcadon Group will offset losses from the drop in Alcadon Group's long position.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB |
| Alcadon Group vs. Goodbye Kansas Group | Alcadon Group vs. Enersize Oy | Alcadon Group vs. SaltX Technology Holding | Alcadon Group vs. Oncopeptides 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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