Correlation Between Swedbank and Baraboo Bancorporation
Can any of the company-specific risk be diversified away by investing in both Swedbank and Baraboo Bancorporation 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 Swedbank and Baraboo Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and Baraboo Bancorporation, you can compare the effects of market volatilities on Swedbank and Baraboo Bancorporation 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 Swedbank with a short position of Baraboo Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Baraboo Bancorporation.
Diversification Opportunities for Swedbank and Baraboo Bancorporation
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swedbank and Baraboo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Baraboo Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baraboo Bancorporation and Swedbank 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 Swedbank AB are associated (or correlated) with Baraboo Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baraboo Bancorporation has no effect on the direction of Swedbank i.e., Swedbank and Baraboo Bancorporation go up and down completely randomly.
Pair Corralation between Swedbank and Baraboo Bancorporation
Assuming the 90 days horizon Swedbank AB is expected to generate 0.53 times more return on investment than Baraboo Bancorporation. However, Swedbank AB is 1.89 times less risky than Baraboo Bancorporation. It trades about 0.04 of its potential returns per unit of risk. Baraboo Bancorporation is currently generating about 0.02 per unit of risk. If you would invest 1,439 in Swedbank AB on August 30, 2024 and sell it today you would earn a total of 488.00 from holding Swedbank AB or generate 33.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.63% |
| Values | Daily Returns |
Swedbank AB vs. Baraboo Bancorp.
Performance |
| Timeline |
| Swedbank AB |
| Baraboo Bancorporation |
Swedbank and Baraboo Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Baraboo Bancorporation
The main advantage of trading using opposite Swedbank and Baraboo Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Baraboo Bancorporation 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 Baraboo Bancorporation will offset losses from the drop in Baraboo Bancorporation's long position.| Swedbank vs. United Overseas Bank | Swedbank vs. KBC Groep NV | Swedbank vs. Jyske Bank AS | Swedbank vs. Israel Discount Bank |
| Baraboo Bancorporation vs. Andover Bancorp | Baraboo Bancorporation vs. Aozora Bank Ltd | Baraboo Bancorporation vs. Israel Discount Bank | Baraboo Bancorporation vs. Schweizerische Nationalbank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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