Correlation Between Svenska Handelsbanken and TradeDoubler
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and TradeDoubler 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 TradeDoubler 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 TradeDoubler AB, you can compare the effects of market volatilities on Svenska Handelsbanken and TradeDoubler 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 TradeDoubler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and TradeDoubler.
Diversification Opportunities for Svenska Handelsbanken and TradeDoubler
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Svenska and TradeDoubler is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and TradeDoubler AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TradeDoubler 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 TradeDoubler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TradeDoubler AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and TradeDoubler go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and TradeDoubler
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.64 times more return on investment than TradeDoubler. However, Svenska Handelsbanken AB is 1.57 times less risky than TradeDoubler. It trades about 0.09 of its potential returns per unit of risk. TradeDoubler AB is currently generating about -0.02 per unit of risk. If you would invest 10,515 in Svenska Handelsbanken AB on September 3, 2024 and sell it today you would earn a total of 835.00 from holding Svenska Handelsbanken AB or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. TradeDoubler AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| TradeDoubler AB |
Svenska Handelsbanken and TradeDoubler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and TradeDoubler
The main advantage of trading using opposite Svenska Handelsbanken and TradeDoubler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, TradeDoubler 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 TradeDoubler will offset losses from the drop in TradeDoubler'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 |
| TradeDoubler vs. Tele2 AB | TradeDoubler vs. Swedbank AB | TradeDoubler vs. Svenska Handelsbanken AB | TradeDoubler vs. Nordea Bank Abp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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