Correlation Between Svenska Handelsbanken and Arctic Blue
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Arctic Blue 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 Arctic Blue 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 Arctic Blue Beverages, you can compare the effects of market volatilities on Svenska Handelsbanken and Arctic Blue 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 Arctic Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Arctic Blue.
Diversification Opportunities for Svenska Handelsbanken and Arctic Blue
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Svenska and Arctic is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages 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 Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Arctic Blue go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Arctic Blue
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.35 times more return on investment than Arctic Blue. However, Svenska Handelsbanken AB is 2.84 times less risky than Arctic Blue. It trades about 0.06 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.46 per unit of risk. If you would invest 14,650 in Svenska Handelsbanken AB on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Svenska Handelsbanken AB or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Arctic Blue Beverages
Performance |
| Timeline |
| Svenska Handelsbanken |
| Arctic Blue Beverages |
Svenska Handelsbanken and Arctic Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Arctic Blue
The main advantage of trading using opposite Svenska Handelsbanken and Arctic Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Arctic Blue 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 Arctic Blue will offset losses from the drop in Arctic Blue'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 |
| Arctic Blue vs. Sdiptech AB | Arctic Blue vs. SolTech Energy Sweden | Arctic Blue vs. White Pearl Technology | Arctic Blue vs. Investment AB Oresund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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