Correlation Between Sekisui House and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Sekisui House and Svenska Handelsbanken 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 Sekisui House and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekisui House Ltd and Svenska Handelsbanken PK, you can compare the effects of market volatilities on Sekisui House and Svenska Handelsbanken 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 Sekisui House with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekisui House and Svenska Handelsbanken.
Diversification Opportunities for Sekisui House and Svenska Handelsbanken
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sekisui and Svenska is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sekisui House Ltd and Svenska Handelsbanken PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Sekisui House 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 Sekisui House Ltd are associated (or correlated) with Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Sekisui House i.e., Sekisui House and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Sekisui House and Svenska Handelsbanken
Assuming the 90 days horizon Sekisui House is expected to generate 2.58 times less return on investment than Svenska Handelsbanken. In addition to that, Sekisui House is 1.12 times more volatile than Svenska Handelsbanken PK. It trades about 0.02 of its total potential returns per unit of risk. Svenska Handelsbanken PK is currently generating about 0.06 per unit of volatility. If you would invest 465.00 in Svenska Handelsbanken PK on September 2, 2024 and sell it today you would earn a total of 49.00 from holding Svenska Handelsbanken PK or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekisui House Ltd vs. Svenska Handelsbanken PK
Performance |
| Timeline |
| Sekisui House |
| Svenska Handelsbanken |
Sekisui House and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekisui House and Svenska Handelsbanken
The main advantage of trading using opposite Sekisui House and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekisui House position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.| Sekisui House vs. Daiwa House Industry | Sekisui House vs. Shiseido Company | Sekisui House vs. Secom Co Ltd | Sekisui House vs. Telenor ASA ADR |
| Svenska Handelsbanken vs. Bank of America | Svenska Handelsbanken vs. Bank of America | Svenska Handelsbanken vs. Bank of America | Svenska Handelsbanken vs. Bank of America |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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