Correlation Between Spring Valley and Swedbank
Can any of the company-specific risk be diversified away by investing in both Spring Valley and Swedbank 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 Spring Valley and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and Swedbank AB, you can compare the effects of market volatilities on Spring Valley and Swedbank 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 Spring Valley with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and Swedbank.
Diversification Opportunities for Spring Valley and Swedbank
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spring and Swedbank is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and Spring Valley 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 Spring Valley Acquisition are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Spring Valley i.e., Spring Valley and Swedbank go up and down completely randomly.
Pair Corralation between Spring Valley and Swedbank
Given the investment horizon of 90 days Spring Valley Acquisition is expected to under-perform the Swedbank. But the stock apears to be less risky and, when comparing its historical volatility, Spring Valley Acquisition is 3.33 times less risky than Swedbank. The stock trades about -0.37 of its potential returns per unit of risk. The Swedbank AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,049 in Swedbank AB on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Swedbank AB or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spring Valley Acquisition vs. Swedbank AB
Performance |
| Timeline |
| Spring Valley Acquisition |
| Swedbank AB |
Spring Valley and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Valley and Swedbank
The main advantage of trading using opposite Spring Valley and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.The idea behind Spring Valley Acquisition and Swedbank 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.| Swedbank vs. PT Bank Rakyat | Swedbank vs. Morningstar Unconstrained Allocation | Swedbank vs. Bondbloxx ETF Trust | Swedbank vs. Spring Valley Acquisition |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |