Correlation Between SinterCast and Studsvik
Can any of the company-specific risk be diversified away by investing in both SinterCast and Studsvik 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 SinterCast and Studsvik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SinterCast AB and Studsvik AB, you can compare the effects of market volatilities on SinterCast and Studsvik 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 SinterCast with a short position of Studsvik. Check out your portfolio center. Please also check ongoing floating volatility patterns of SinterCast and Studsvik.
Diversification Opportunities for SinterCast and Studsvik
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SinterCast and Studsvik is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and Studsvik AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Studsvik AB and SinterCast 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 SinterCast AB are associated (or correlated) with Studsvik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Studsvik AB has no effect on the direction of SinterCast i.e., SinterCast and Studsvik go up and down completely randomly.
Pair Corralation between SinterCast and Studsvik
Assuming the 90 days trading horizon SinterCast AB is expected to under-perform the Studsvik. But the stock apears to be less risky and, when comparing its historical volatility, SinterCast AB is 1.09 times less risky than Studsvik. The stock trades about -0.05 of its potential returns per unit of risk. The Studsvik AB is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 13,440 in Studsvik AB on October 25, 2024 and sell it today you would lose (1,260) from holding Studsvik AB or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SinterCast AB vs. Studsvik AB
Performance |
| Timeline |
| SinterCast AB |
| Studsvik AB |
SinterCast and Studsvik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SinterCast and Studsvik
The main advantage of trading using opposite SinterCast and Studsvik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SinterCast position performs unexpectedly, Studsvik 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 Studsvik will offset losses from the drop in Studsvik's long position.| SinterCast vs. Lifco AB | SinterCast vs. Addtech AB | SinterCast vs. NIBE Industrier AB | SinterCast vs. Investment AB Latour |
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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