Correlation Between Svenska Handelsbanken and Systemair
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Systemair 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 Systemair 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 Systemair AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Systemair 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 Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Systemair.
Diversification Opportunities for Svenska Handelsbanken and Systemair
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Svenska and Systemair is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Systemair go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Systemair
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 10.41 times less return on investment than Systemair. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 3.18 times less risky than Systemair. It trades about 0.06 of its potential returns per unit of risk. Systemair AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 8,610 in Systemair AB on September 12, 2024 and sell it today you would earn a total of 1,170 from holding Systemair AB or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Systemair AB
Performance |
| Timeline |
| Svenska Handelsbanken |
| Systemair AB |
Svenska Handelsbanken and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Systemair
The main advantage of trading using opposite Svenska Handelsbanken and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair'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 |
| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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