Correlation Between AB SKF and IZafe Group
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By analyzing existing cross correlation between AB SKF and iZafe Group AB, you can compare the effects of market volatilities on AB SKF and IZafe Group 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 AB SKF with a short position of IZafe Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB SKF and IZafe Group.
Diversification Opportunities for AB SKF and IZafe Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SKF-B and IZafe is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AB SKF and iZafe Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iZafe Group AB and AB SKF 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 AB SKF are associated (or correlated) with IZafe Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iZafe Group AB has no effect on the direction of AB SKF i.e., AB SKF and IZafe Group go up and down completely randomly.
Pair Corralation between AB SKF and IZafe Group
Assuming the 90 days trading horizon AB SKF is expected to under-perform the IZafe Group. But the stock apears to be less risky and, when comparing its historical volatility, AB SKF is 3.5 times less risky than IZafe Group. The stock trades about 0.0 of its potential returns per unit of risk. The iZafe Group AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 20.00 in iZafe Group AB on September 24, 2024 and sell it today you would earn a total of 1.00 from holding iZafe Group AB or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB SKF vs. iZafe Group AB
Performance |
| Timeline |
| AB SKF |
| iZafe Group AB |
AB SKF and IZafe Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB SKF and IZafe Group
The main advantage of trading using opposite AB SKF and IZafe Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB SKF position performs unexpectedly, IZafe Group 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 IZafe Group will offset losses from the drop in IZafe Group's long position.The idea behind AB SKF and iZafe Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IZafe Group vs. Skanska AB | IZafe Group vs. AB SKF | IZafe Group vs. Tele2 AB | IZafe Group vs. AB Electrolux |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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