Correlation Between Sonetel AB and SECITS Holding
Can any of the company-specific risk be diversified away by investing in both Sonetel AB and SECITS Holding 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 Sonetel AB and SECITS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonetel AB and SECITS Holding AB, you can compare the effects of market volatilities on Sonetel AB and SECITS Holding 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 Sonetel AB with a short position of SECITS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonetel AB and SECITS Holding.
Diversification Opportunities for Sonetel AB and SECITS Holding
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonetel and SECITS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sonetel AB and SECITS Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECITS Holding AB and Sonetel 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 Sonetel AB are associated (or correlated) with SECITS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECITS Holding AB has no effect on the direction of Sonetel AB i.e., Sonetel AB and SECITS Holding go up and down completely randomly.
Pair Corralation between Sonetel AB and SECITS Holding
Assuming the 90 days trading horizon Sonetel AB is expected to generate 0.34 times more return on investment than SECITS Holding. However, Sonetel AB is 2.96 times less risky than SECITS Holding. It trades about 0.0 of its potential returns per unit of risk. SECITS Holding AB is currently generating about -0.02 per unit of risk. If you would invest 486.00 in Sonetel AB on August 25, 2024 and sell it today you would lose (60.00) from holding Sonetel AB or give up 12.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonetel AB vs. SECITS Holding AB
Performance |
| Timeline |
| Sonetel AB |
| SECITS Holding AB |
Sonetel AB and SECITS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonetel AB and SECITS Holding
The main advantage of trading using opposite Sonetel AB and SECITS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonetel AB position performs unexpectedly, SECITS Holding 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 SECITS Holding will offset losses from the drop in SECITS Holding's long position.| Sonetel AB vs. SECITS Holding AB | Sonetel AB vs. Zaplox AB | Sonetel AB vs. XMReality AB | Sonetel AB vs. Nicoccino Holding AB |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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