Correlation Between Svolder AB and Catella AB
Can any of the company-specific risk be diversified away by investing in both Svolder AB and Catella 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 Svolder AB and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svolder AB and Catella AB A, you can compare the effects of market volatilities on Svolder AB and Catella 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 Svolder AB with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svolder AB and Catella AB.
Diversification Opportunities for Svolder AB and Catella AB
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svolder and Catella is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Svolder AB and Catella AB A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB A and Svolder 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 Svolder AB are associated (or correlated) with Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB A has no effect on the direction of Svolder AB i.e., Svolder AB and Catella AB go up and down completely randomly.
Pair Corralation between Svolder AB and Catella AB
Assuming the 90 days trading horizon Svolder AB is expected to under-perform the Catella AB. But the stock apears to be less risky and, when comparing its historical volatility, Svolder AB is 1.41 times less risky than Catella AB. The stock trades about -0.2 of its potential returns per unit of risk. The Catella AB A is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,840 in Catella AB A on September 13, 2024 and sell it today you would lose (200.00) from holding Catella AB A or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svolder AB vs. Catella AB A
Performance |
| Timeline |
| Svolder AB |
| Catella AB A |
Svolder AB and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svolder AB and Catella AB
The main advantage of trading using opposite Svolder AB and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svolder AB position performs unexpectedly, Catella 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 Catella AB will offset losses from the drop in Catella AB's long position.| Svolder AB vs. Svolder AB | Svolder AB vs. Creades AB | Svolder AB vs. Kinnevik Investment AB | Svolder AB vs. Systemair AB |
| Catella AB vs. Catella AB | Catella AB vs. Svolder AB | Catella AB vs. Beijer Alma AB | Catella AB vs. BTS Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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