Correlation Between Svenska Handelsbanken and NAXS Nordic
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and NAXS Nordic 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 NAXS Nordic 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 NAXS Nordic Access, you can compare the effects of market volatilities on Svenska Handelsbanken and NAXS Nordic 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 NAXS Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and NAXS Nordic.
Diversification Opportunities for Svenska Handelsbanken and NAXS Nordic
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Svenska and NAXS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and NAXS Nordic Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAXS Nordic Access 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 NAXS Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAXS Nordic Access has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and NAXS Nordic go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and NAXS Nordic
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.98 times more return on investment than NAXS Nordic. However, Svenska Handelsbanken AB is 1.02 times less risky than NAXS Nordic. It trades about 0.59 of its potential returns per unit of risk. NAXS Nordic Access is currently generating about 0.24 per unit of risk. If you would invest 16,730 in Svenska Handelsbanken AB on December 1, 2024 and sell it today you would earn a total of 3,150 from holding Svenska Handelsbanken AB or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. NAXS Nordic Access
Performance |
| Timeline |
| Svenska Handelsbanken |
| NAXS Nordic Access |
Svenska Handelsbanken and NAXS Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and NAXS Nordic
The main advantage of trading using opposite Svenska Handelsbanken and NAXS Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, NAXS Nordic 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 NAXS Nordic will offset losses from the drop in NAXS Nordic'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 |
| NAXS Nordic vs. AB Traction | NAXS Nordic vs. Havsfrun Investment AB | NAXS Nordic vs. Novotek AB | NAXS Nordic 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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