Correlation Between Sinch AB and SBB-B
Can any of the company-specific risk be diversified away by investing in both Sinch AB and SBB-B 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 Sinch AB and SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinch AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Sinch AB and SBB-B 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 Sinch AB with a short position of SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and SBB-B.
Diversification Opportunities for Sinch AB and SBB-B
Very weak diversification
The 3 months correlation between Sinch and SBB-B is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget and Sinch AB 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 Sinch AB are associated (or correlated) with SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Sinch AB i.e., Sinch AB and SBB-B go up and down completely randomly.
Pair Corralation between Sinch AB and SBB-B
Assuming the 90 days trading horizon Sinch AB is expected to under-perform the SBB-B. But the stock apears to be less risky and, when comparing its historical volatility, Sinch AB is 1.3 times less risky than SBB-B. The stock trades about -0.01 of its potential returns per unit of risk. The Samhllsbyggnadsbolaget i Norden is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 334.00 in Samhllsbyggnadsbolaget i Norden on November 5, 2024 and sell it today you would earn a total of 229.00 from holding Samhllsbyggnadsbolaget i Norden or generate 68.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinch AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Sinch AB |
| Samhllsbyggnadsbolaget |
Sinch AB and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and SBB-B
The main advantage of trading using opposite Sinch AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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