Correlation Between Svenska Handelsbanken and OMX Stockholm
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By analyzing existing cross correlation between Svenska Handelsbanken AB and OMX Stockholm Mid, you can compare the effects of market volatilities on Svenska Handelsbanken and OMX Stockholm 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 OMX Stockholm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and OMX Stockholm.
Diversification Opportunities for Svenska Handelsbanken and OMX Stockholm
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Svenska and OMX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and OMX Stockholm Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMX Stockholm Mid 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 OMX Stockholm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMX Stockholm Mid has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and OMX Stockholm go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and OMX Stockholm
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 1.89 times more return on investment than OMX Stockholm. However, Svenska Handelsbanken is 1.89 times more volatile than OMX Stockholm Mid. It trades about 0.54 of its potential returns per unit of risk. OMX Stockholm Mid is currently generating about 0.26 per unit of risk. If you would invest 16,550 in Svenska Handelsbanken AB on November 27, 2024 and sell it today you would earn a total of 2,720 from holding Svenska Handelsbanken AB or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. OMX Stockholm Mid
Performance |
| Timeline |
Svenska Handelsbanken and OMX Stockholm Volatility Contrast
Predicted Return Density |
| Returns |
Svenska Handelsbanken AB
Pair trading matchups for Svenska Handelsbanken
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Pair Trading with Svenska Handelsbanken and OMX Stockholm
The main advantage of trading using opposite Svenska Handelsbanken and OMX Stockholm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, OMX Stockholm 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 OMX Stockholm will offset losses from the drop in OMX Stockholm'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 |
| OMX Stockholm vs. Catena Media plc | OMX Stockholm vs. USWE Sports AB | OMX Stockholm vs. Scandic Hotels Group | OMX Stockholm vs. FormPipe Software 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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