Correlation Between Stille AB and Swedish Orphan
Can any of the company-specific risk be diversified away by investing in both Stille AB and Swedish Orphan 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 Stille AB and Swedish Orphan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stille AB and Swedish Orphan Biovitrum, you can compare the effects of market volatilities on Stille AB and Swedish Orphan 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 Stille AB with a short position of Swedish Orphan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stille AB and Swedish Orphan.
Diversification Opportunities for Stille AB and Swedish Orphan
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stille and Swedish is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stille AB and Swedish Orphan Biovitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Orphan Biovitrum and Stille 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 Stille AB are associated (or correlated) with Swedish Orphan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Orphan Biovitrum has no effect on the direction of Stille AB i.e., Stille AB and Swedish Orphan go up and down completely randomly.
Pair Corralation between Stille AB and Swedish Orphan
Assuming the 90 days trading horizon Stille AB is expected to generate 1.24 times more return on investment than Swedish Orphan. However, Stille AB is 1.24 times more volatile than Swedish Orphan Biovitrum. It trades about 0.06 of its potential returns per unit of risk. Swedish Orphan Biovitrum is currently generating about 0.06 per unit of risk. If you would invest 11,270 in Stille AB on September 26, 2024 and sell it today you would earn a total of 9,430 from holding Stille AB or generate 83.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stille AB vs. Swedish Orphan Biovitrum
Performance |
| Timeline |
| Stille AB |
| Swedish Orphan Biovitrum |
Stille AB and Swedish Orphan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stille AB and Swedish Orphan
The main advantage of trading using opposite Stille AB and Swedish Orphan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stille AB position performs unexpectedly, Swedish Orphan 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 Swedish Orphan will offset losses from the drop in Swedish Orphan's long position.| Stille AB vs. Sinch AB | Stille AB vs. Hexatronic Group AB | Stille AB vs. Surgical Science Sweden | Stille AB vs. Embracer Group AB |
| Swedish Orphan vs. Stille AB | Swedish Orphan vs. Midsona AB | Swedish Orphan vs. Precio Fishbone AB | Swedish Orphan vs. C Rad 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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