Correlation Between Swedbank and United Overseas
Can any of the company-specific risk be diversified away by investing in both Swedbank and United Overseas 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 United Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and United Overseas Bank, you can compare the effects of market volatilities on Swedbank and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and United Overseas.
Diversification Opportunities for Swedbank and United Overseas
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swedbank and United is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Swedbank i.e., Swedbank and United Overseas go up and down completely randomly.
Pair Corralation between Swedbank and United Overseas
Assuming the 90 days horizon Swedbank AB is expected to generate 1.71 times more return on investment than United Overseas. However, Swedbank is 1.71 times more volatile than United Overseas Bank. It trades about 0.04 of its potential returns per unit of risk. United Overseas Bank is currently generating about 0.06 per unit of risk. If you would invest 1,433 in Swedbank AB on August 24, 2024 and sell it today you would earn a total of 507.00 from holding Swedbank AB or generate 35.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Swedbank AB vs. United Overseas Bank
Performance |
| Timeline |
| Swedbank AB |
| United Overseas Bank |
Swedbank and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and United Overseas
The main advantage of trading using opposite Swedbank and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| Swedbank vs. United Overseas Bank | Swedbank vs. KBC Groep NV | Swedbank vs. Jyske Bank AS | Swedbank vs. Israel Discount Bank |
| United Overseas vs. Invesco High Income | United Overseas vs. Blackrock Muniholdings Ny | United Overseas vs. MFS Investment Grade | United Overseas vs. Federated Premier Municipal |
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 CEOs Directory module to screen CEOs from public companies around the world.
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