Correlation Between Svenska Handelsbanken and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Addtech AB 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 Addtech AB 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 Addtech AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Addtech AB.
Diversification Opportunities for Svenska Handelsbanken and Addtech AB
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and Addtech is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Addtech AB go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Addtech AB
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 2.78 times less return on investment than Addtech AB. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 1.42 times less risky than Addtech AB. It trades about 0.04 of its potential returns per unit of risk. Addtech AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15,529 in Addtech AB on August 28, 2024 and sell it today you would earn a total of 14,591 from holding Addtech AB or generate 93.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Addtech AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Addtech AB |
Svenska Handelsbanken and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Addtech AB
The main advantage of trading using opposite Svenska Handelsbanken and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Svenska Handelsbanken vs. Svenska Handelsbanken AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Atlas Copco AB | Svenska Handelsbanken vs. Skandinaviska Enskilda Banken |
| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |