Correlation Between Svenska Handelsbanken and Indutrade
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Indutrade.
Diversification Opportunities for Svenska Handelsbanken and Indutrade
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Svenska and Indutrade is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Indutrade go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Indutrade
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 1.33 times less return on investment than Indutrade. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 1.22 times less risky than Indutrade. It trades about 0.04 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20,601 in Indutrade AB on September 13, 2024 and sell it today you would earn a total of 8,079 from holding Indutrade AB or generate 39.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Indutrade AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Indutrade AB |
Svenska Handelsbanken and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Indutrade
The main advantage of trading using opposite Svenska Handelsbanken and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade'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 |
| Indutrade vs. Skandinaviska Enskilda Banken | Indutrade vs. Skandinaviska Enskilda Banken | Indutrade vs. Swedbank AB | Indutrade vs. Svenska Handelsbanken 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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