Correlation Between SSAB AB and Alleima AB
Can any of the company-specific risk be diversified away by investing in both SSAB AB and Alleima 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 SSAB AB and Alleima AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSAB AB and Alleima AB, you can compare the effects of market volatilities on SSAB AB and Alleima 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 SSAB AB with a short position of Alleima AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and Alleima AB.
Diversification Opportunities for SSAB AB and Alleima AB
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSAB and Alleima is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB and Alleima AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleima AB and SSAB 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 SSAB AB are associated (or correlated) with Alleima AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleima AB has no effect on the direction of SSAB AB i.e., SSAB AB and Alleima AB go up and down completely randomly.
Pair Corralation between SSAB AB and Alleima AB
Assuming the 90 days trading horizon SSAB AB is expected to under-perform the Alleima AB. In addition to that, SSAB AB is 1.04 times more volatile than Alleima AB. It trades about -0.13 of its total potential returns per unit of risk. Alleima AB is currently generating about 0.22 per unit of volatility. If you would invest 7,235 in Alleima AB on October 26, 2024 and sell it today you would earn a total of 1,105 from holding Alleima AB or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
SSAB AB vs. Alleima AB
Performance |
| Timeline |
| SSAB AB |
| Alleima AB |
SSAB AB and Alleima AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSAB AB and Alleima AB
The main advantage of trading using opposite SSAB AB and Alleima AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSAB AB position performs unexpectedly, Alleima 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 Alleima AB will offset losses from the drop in Alleima AB's long position.The idea behind SSAB AB and Alleima 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.| Alleima AB vs. Sandvik AB | Alleima AB vs. AB SKF | Alleima AB vs. Svenska Handelsbanken AB | Alleima AB vs. Essity 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |