Correlation Between Svenska Handelsbanken and Catella AB
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Catella 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 Handelsbanken and Catella AB 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 Catella AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Catella 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 Handelsbanken with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Catella AB.
Diversification Opportunities for Svenska Handelsbanken and Catella AB
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and Catella is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella 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 Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Catella AB go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Catella AB
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.65 times more return on investment than Catella AB. However, Svenska Handelsbanken AB is 1.54 times less risky than Catella AB. It trades about -0.01 of its potential returns per unit of risk. Catella AB is currently generating about -0.08 per unit of risk. If you would invest 11,380 in Svenska Handelsbanken AB on September 3, 2024 and sell it today you would lose (30.00) from holding Svenska Handelsbanken AB or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Catella AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Catella AB |
Svenska Handelsbanken and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Catella AB
The main advantage of trading using opposite Svenska Handelsbanken and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Catella 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 Catella AB will offset losses from the drop in Catella AB'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 |
| Catella AB vs. L E Lundbergfretagen | Catella AB vs. Industrivarden AB ser | Catella AB vs. Svenska Handelsbanken AB | Catella AB vs. Investment AB Latour |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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