Correlation Between Square and SILEON AB
Can any of the company-specific risk be diversified away by investing in both Square and SILEON 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 Square and SILEON AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Square Inc and SILEON AB ON, you can compare the effects of market volatilities on Square and SILEON 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 Square with a short position of SILEON AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Square and SILEON AB.
Diversification Opportunities for Square and SILEON AB
Very good diversification
The 3 months correlation between Square and SILEON is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Square Inc and SILEON AB ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILEON AB ON and Square 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 Square Inc are associated (or correlated) with SILEON AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILEON AB ON has no effect on the direction of Square i.e., Square and SILEON AB go up and down completely randomly.
Pair Corralation between Square and SILEON AB
Assuming the 90 days horizon Square is expected to generate 159.66 times less return on investment than SILEON AB. But when comparing it to its historical volatility, Square Inc is 80.02 times less risky than SILEON AB. It trades about 0.12 of its potential returns per unit of risk. SILEON AB ON is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 416.00 in SILEON AB ON on November 6, 2024 and sell it today you would lose (392.00) from holding SILEON AB ON or give up 94.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.61% |
| Values | Daily Returns |
Square Inc vs. SILEON AB ON
Performance |
| Timeline |
| Square Inc |
| SILEON AB ON |
Square and SILEON AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Square and SILEON AB
The main advantage of trading using opposite Square and SILEON AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Square position performs unexpectedly, SILEON 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 SILEON AB will offset losses from the drop in SILEON AB's long position.| Square vs. Shopify | Square vs. BYD Company Limited | Square vs. PayPal Holdings | Square vs. Palantir Technologies |
| SILEON AB vs. COREBRIDGE FINANCIAL INC | SILEON AB vs. Motorcar Parts of | SILEON AB vs. Webster Financial | SILEON AB vs. BANK OF CHINA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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