Correlation Between Svolder AB and L E
Can any of the company-specific risk be diversified away by investing in both Svolder AB and L E 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 L E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svolder AB and L E Lundbergfretagen, you can compare the effects of market volatilities on Svolder AB and L E 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 L E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svolder AB and L E.
Diversification Opportunities for Svolder AB and L E
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svolder and LUND-B is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Svolder AB and L E Lundbergfretagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L E Lundbergfretagen 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 L E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L E Lundbergfretagen has no effect on the direction of Svolder AB i.e., Svolder AB and L E go up and down completely randomly.
Pair Corralation between Svolder AB and L E
Assuming the 90 days trading horizon Svolder AB is expected to under-perform the L E. In addition to that, Svolder AB is 1.34 times more volatile than L E Lundbergfretagen. It trades about -0.32 of its total potential returns per unit of risk. L E Lundbergfretagen is currently generating about -0.09 per unit of volatility. If you would invest 53,350 in L E Lundbergfretagen on August 31, 2024 and sell it today you would lose (1,150) from holding L E Lundbergfretagen or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Svolder AB vs. L E Lundbergfretagen
Performance |
| Timeline |
| Svolder AB |
| L E Lundbergfretagen |
Svolder AB and L E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svolder AB and L E
The main advantage of trading using opposite Svolder AB and L E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svolder AB position performs unexpectedly, L E 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 L E will offset losses from the drop in L E's long position.| Svolder AB vs. Investment AB Latour | Svolder AB vs. Bure Equity AB | Svolder AB vs. Kinnevik Investment AB | Svolder AB vs. Industrivarden AB ser |
| L E vs. Investment AB Latour | L E vs. Industrivarden AB ser | L E vs. Kinnevik Investment AB | L E vs. Investor AB ser |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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