Correlation Between Svenska Handelsbanken and Sleep Cycle
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Sleep Cycle 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 Sleep Cycle 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 Sleep Cycle AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Sleep Cycle 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 Sleep Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Sleep Cycle.
Diversification Opportunities for Svenska Handelsbanken and Sleep Cycle
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Svenska and Sleep is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Sleep Cycle AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sleep Cycle 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 Sleep Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sleep Cycle AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Sleep Cycle go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Sleep Cycle
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.67 times more return on investment than Sleep Cycle. However, Svenska Handelsbanken AB is 1.49 times less risky than Sleep Cycle. It trades about 0.05 of its potential returns per unit of risk. Sleep Cycle AB is currently generating about -0.48 per unit of risk. If you would invest 11,095 in Svenska Handelsbanken AB on September 24, 2024 and sell it today you would earn a total of 110.00 from holding Svenska Handelsbanken AB or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Sleep Cycle AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Sleep Cycle AB |
Svenska Handelsbanken and Sleep Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Sleep Cycle
The main advantage of trading using opposite Svenska Handelsbanken and Sleep Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Sleep Cycle 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 Sleep Cycle will offset losses from the drop in Sleep Cycle's long position.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB | Svenska Handelsbanken vs. Investor AB ser |
| Sleep Cycle vs. Humble Group AB | Sleep Cycle vs. Enad Global 7 | Sleep Cycle vs. Goodbye Kansas Group | Sleep Cycle vs. Mekonomen 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |