Correlation Between Svedbergs and SECITS Holding
Can any of the company-specific risk be diversified away by investing in both Svedbergs 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 Svedbergs and SECITS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svedbergs i Dalstorp and SECITS Holding AB, you can compare the effects of market volatilities on Svedbergs 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 Svedbergs with a short position of SECITS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svedbergs and SECITS Holding.
Diversification Opportunities for Svedbergs and SECITS Holding
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Svedbergs and SECITS is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Svedbergs i Dalstorp 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 Svedbergs 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 Svedbergs i Dalstorp 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 Svedbergs i.e., Svedbergs and SECITS Holding go up and down completely randomly.
Pair Corralation between Svedbergs and SECITS Holding
Assuming the 90 days trading horizon Svedbergs i Dalstorp is expected to under-perform the SECITS Holding. But the stock apears to be less risky and, when comparing its historical volatility, Svedbergs i Dalstorp is 7.44 times less risky than SECITS Holding. The stock trades about -0.06 of its potential returns per unit of risk. The SECITS Holding AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.64 in SECITS Holding AB on August 29, 2024 and sell it today you would earn a total of 0.34 from holding SECITS Holding AB or generate 20.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svedbergs i Dalstorp vs. SECITS Holding AB
Performance |
| Timeline |
| Svedbergs i Dalstorp |
| SECITS Holding AB |
Svedbergs and SECITS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svedbergs and SECITS Holding
The main advantage of trading using opposite Svedbergs and SECITS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svedbergs 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.| Svedbergs vs. Systemair AB | Svedbergs vs. Softronic AB | Svedbergs vs. Inwido AB | Svedbergs vs. Lindab International AB |
| SECITS Holding vs. Softronic AB | SECITS Holding vs. Prevas AB | SECITS Holding vs. FormPipe Software AB | SECITS Holding vs. Dedicare 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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