Correlation Between Svenska Handelsbanken and VIMAB Group
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and VIMAB Group 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 VIMAB Group 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 VIMAB Group AB, you can compare the effects of market volatilities on Svenska Handelsbanken and VIMAB Group 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 VIMAB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and VIMAB Group.
Diversification Opportunities for Svenska Handelsbanken and VIMAB Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Svenska and VIMAB is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and VIMAB Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIMAB Group 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 VIMAB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIMAB Group AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and VIMAB Group go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and VIMAB Group
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 2.87 times less return on investment than VIMAB Group. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 4.4 times less risky than VIMAB Group. It trades about 0.03 of its potential returns per unit of risk. VIMAB Group AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 840.00 in VIMAB Group AB on August 27, 2024 and sell it today you would lose (90.00) from holding VIMAB Group AB or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. VIMAB Group AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| VIMAB Group AB |
Svenska Handelsbanken and VIMAB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and VIMAB Group
The main advantage of trading using opposite Svenska Handelsbanken and VIMAB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, VIMAB Group 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 VIMAB Group will offset losses from the drop in VIMAB Group'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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