Correlation Between Swedish Orphan and Stille AB
Can any of the company-specific risk be diversified away by investing in both Swedish Orphan and Stille AB 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 Swedish Orphan and Stille AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedish Orphan Biovitrum and Stille AB, you can compare the effects of market volatilities on Swedish Orphan and Stille AB 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 Swedish Orphan with a short position of Stille AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedish Orphan and Stille AB.
Diversification Opportunities for Swedish Orphan and Stille AB
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Swedish and Stille is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Orphan Biovitrum and Stille AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stille AB and Swedish Orphan 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 Swedish Orphan Biovitrum are associated (or correlated) with Stille AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stille AB has no effect on the direction of Swedish Orphan i.e., Swedish Orphan and Stille AB go up and down completely randomly.
Pair Corralation between Swedish Orphan and Stille AB
Assuming the 90 days trading horizon Swedish Orphan Biovitrum is expected to under-perform the Stille AB. In addition to that, Swedish Orphan is 1.64 times more volatile than Stille AB. It trades about -0.18 of its total potential returns per unit of risk. Stille AB is currently generating about 0.06 per unit of volatility. If you would invest 21,000 in Stille AB on August 30, 2024 and sell it today you would earn a total of 400.00 from holding Stille AB or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedish Orphan Biovitrum vs. Stille AB
Performance |
| Timeline |
| Swedish Orphan Biovitrum |
| Stille AB |
Swedish Orphan and Stille AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedish Orphan and Stille AB
The main advantage of trading using opposite Swedish Orphan and Stille AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedish Orphan position performs unexpectedly, Stille AB 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 Stille AB will offset losses from the drop in Stille AB's long position.| Swedish Orphan vs. Getinge AB ser | Swedish Orphan vs. Elekta AB | Swedish Orphan vs. AB SKF | Swedish Orphan vs. Saab AB |
| Stille AB vs. C Rad AB | Stille AB vs. CellaVision AB | Stille AB vs. Boule Diagnostics AB | Stille AB vs. Genovis 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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