Correlation Between Svenska Handelsbanken and SenzaGen
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and SenzaGen 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 SenzaGen 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 SenzaGen AB, you can compare the effects of market volatilities on Svenska Handelsbanken and SenzaGen 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 SenzaGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and SenzaGen.
Diversification Opportunities for Svenska Handelsbanken and SenzaGen
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Svenska and SenzaGen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen 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 SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and SenzaGen go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and SenzaGen
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.5 times more return on investment than SenzaGen. However, Svenska Handelsbanken AB is 1.99 times less risky than SenzaGen. It trades about -0.07 of its potential returns per unit of risk. SenzaGen AB is currently generating about -0.13 per unit of risk. If you would invest 14,760 in Svenska Handelsbanken AB on September 3, 2024 and sell it today you would lose (190.00) from holding Svenska Handelsbanken AB or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. SenzaGen AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| SenzaGen AB |
Svenska Handelsbanken and SenzaGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and SenzaGen
The main advantage of trading using opposite Svenska Handelsbanken and SenzaGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, SenzaGen 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 SenzaGen will offset losses from the drop in SenzaGen'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 |
| SenzaGen vs. Simris Alg AB | SenzaGen vs. Immunovia publ AB | SenzaGen vs. Sedana Medical AB | SenzaGen vs. KABE Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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