Correlation Between Svenska Handelsbanken and K2A Knaust
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and K2A Knaust 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 K2A Knaust 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 K2A Knaust Andersson, you can compare the effects of market volatilities on Svenska Handelsbanken and K2A Knaust 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 K2A Knaust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and K2A Knaust.
Diversification Opportunities for Svenska Handelsbanken and K2A Knaust
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and K2A is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and K2A Knaust Andersson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2A Knaust Andersson 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 K2A Knaust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2A Knaust Andersson has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and K2A Knaust go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and K2A Knaust
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.35 times more return on investment than K2A Knaust. However, Svenska Handelsbanken AB is 2.84 times less risky than K2A Knaust. It trades about 0.03 of its potential returns per unit of risk. K2A Knaust Andersson is currently generating about 0.0 per unit of risk. If you would invest 9,173 in Svenska Handelsbanken AB on August 30, 2024 and sell it today you would earn a total of 2,007 from holding Svenska Handelsbanken AB or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. K2A Knaust Andersson
Performance |
| Timeline |
| Svenska Handelsbanken |
| K2A Knaust Andersson |
Svenska Handelsbanken and K2A Knaust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and K2A Knaust
The main advantage of trading using opposite Svenska Handelsbanken and K2A Knaust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, K2A Knaust 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 K2A Knaust will offset losses from the drop in K2A Knaust'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 |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |