Correlation Between Svenska Handelsbanken and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken 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 Svenska Handelsbanken and Svenska Handelsbanken 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 Svenska Handelsbanken AB, you can compare the effects of market volatilities on Svenska Handelsbanken 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 Svenska Handelsbanken with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Svenska Handelsbanken.
Diversification Opportunities for Svenska Handelsbanken and Svenska Handelsbanken
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svenska and Svenska is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken 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 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 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 Svenska Handelsbanken i.e., Svenska Handelsbanken and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Svenska Handelsbanken
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 1.5 times less return on investment than Svenska Handelsbanken. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 1.34 times less risky than Svenska Handelsbanken. It trades about 0.31 of its potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 15,280 in Svenska Handelsbanken AB on November 3, 2024 and sell it today you would earn a total of 1,340 from holding Svenska Handelsbanken AB or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Svenska Handelsbanken |
Svenska Handelsbanken and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Svenska Handelsbanken
The main advantage of trading using opposite Svenska Handelsbanken and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken 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.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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