Correlation Between Svenska Handelsbanken and Viva Wine
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Viva Wine 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 Viva Wine 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 Viva Wine Group, you can compare the effects of market volatilities on Svenska Handelsbanken and Viva Wine 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 Viva Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Viva Wine.
Diversification Opportunities for Svenska Handelsbanken and Viva Wine
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Svenska and Viva is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Viva Wine Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Wine Group 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 Viva Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Wine Group has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Viva Wine go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Viva Wine
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.53 times more return on investment than Viva Wine. However, Svenska Handelsbanken AB is 1.89 times less risky than Viva Wine. It trades about 0.06 of its potential returns per unit of risk. Viva Wine Group is currently generating about -0.03 per unit of risk. If you would invest 14,200 in Svenska Handelsbanken AB on August 26, 2024 and sell it today you would earn a total of 160.00 from holding Svenska Handelsbanken AB or generate 1.13% 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. Viva Wine Group
Performance |
| Timeline |
| Svenska Handelsbanken |
| Viva Wine Group |
Svenska Handelsbanken and Viva Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Viva Wine
The main advantage of trading using opposite Svenska Handelsbanken and Viva Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Viva Wine 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 Viva Wine will offset losses from the drop in Viva Wine'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 |
| Viva Wine vs. Cint Group AB | Viva Wine vs. Nordic Waterproofing Holding | Viva Wine vs. RVRC Holding AB | Viva Wine vs. Synsam 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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