Correlation Between Svenska Handelsbanken and AroCell AB
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and AroCell 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 AroCell 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 AroCell AB, you can compare the effects of market volatilities on Svenska Handelsbanken and AroCell 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 AroCell AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and AroCell AB.
Diversification Opportunities for Svenska Handelsbanken and AroCell AB
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Svenska and AroCell is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and AroCell AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AroCell 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 AroCell AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AroCell AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and AroCell AB go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and AroCell AB
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.39 times more return on investment than AroCell AB. However, Svenska Handelsbanken AB is 2.56 times less risky than AroCell AB. It trades about 0.07 of its potential returns per unit of risk. AroCell AB is currently generating about -0.01 per unit of risk. If you would invest 10,648 in Svenska Handelsbanken AB on September 1, 2024 and sell it today you would earn a total of 3,922 from holding Svenska Handelsbanken AB or generate 36.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. AroCell AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| AroCell AB |
Svenska Handelsbanken and AroCell AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and AroCell AB
The main advantage of trading using opposite Svenska Handelsbanken and AroCell AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, AroCell 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 AroCell AB will offset losses from the drop in AroCell 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 |
| AroCell AB vs. Smart Eye AB | AroCell AB vs. Genovis AB | AroCell AB vs. Kancera AB | AroCell AB vs. Zignsec 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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