Correlation Between Svenska Handelsbanken and GomSpace Group
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and GomSpace 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 GomSpace 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 GomSpace Group AB, you can compare the effects of market volatilities on Svenska Handelsbanken and GomSpace 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 GomSpace Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and GomSpace Group.
Diversification Opportunities for Svenska Handelsbanken and GomSpace Group
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Svenska and GomSpace is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and GomSpace Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GomSpace 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 GomSpace Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GomSpace Group AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and GomSpace Group go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and GomSpace Group
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 5.49 times less return on investment than GomSpace Group. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 3.68 times less risky than GomSpace Group. It trades about 0.05 of its potential returns per unit of risk. GomSpace Group AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 240.00 in GomSpace Group AB on September 14, 2024 and sell it today you would earn a total of 267.00 from holding GomSpace Group AB or generate 111.25% 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. GomSpace Group AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| GomSpace Group AB |
Svenska Handelsbanken and GomSpace Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and GomSpace Group
The main advantage of trading using opposite Svenska Handelsbanken and GomSpace Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, GomSpace 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 GomSpace Group will offset losses from the drop in GomSpace Group'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 |
| GomSpace Group vs. Ambu AS | GomSpace Group vs. Bavarian Nordic | GomSpace Group vs. Fingerprint Cards AB | GomSpace Group vs. Zealand Pharma AS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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