Correlation Between Svenska Handelsbanken and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Westpac Banking 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 Svenska Handelsbanken and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and Westpac Banking, you can compare the effects of market volatilities on Svenska Handelsbanken and Westpac Banking 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 Svenska Handelsbanken with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Westpac Banking.
Diversification Opportunities for Svenska Handelsbanken and Westpac Banking
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Svenska and Westpac is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Svenska Handelsbanken 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 Svenska Handelsbanken AB are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Westpac Banking go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Westpac Banking
Assuming the 90 days horizon Svenska Handelsbanken AB is expected to under-perform the Westpac Banking. But the pink sheet apears to be less risky and, when comparing its historical volatility, Svenska Handelsbanken AB is 1.92 times less risky than Westpac Banking. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Westpac Banking is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,917 in Westpac Banking on August 28, 2024 and sell it today you would earn a total of 222.00 from holding Westpac Banking or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Westpac Banking
Performance |
| Timeline |
| Svenska Handelsbanken |
| Westpac Banking |
Svenska Handelsbanken and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Westpac Banking
The main advantage of trading using opposite Svenska Handelsbanken and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Svenska Handelsbanken vs. Agricultural Bank | Svenska Handelsbanken vs. China Construction Bank | Svenska Handelsbanken vs. National Australia Bank | Svenska Handelsbanken vs. Bank of America |
| Westpac Banking vs. Commonwealth Bank of | Westpac Banking vs. Svenska Handelsbanken PK | Westpac Banking vs. ANZ Group Holdings | Westpac Banking vs. National Australia Bank |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |