Correlation Between Swedbank and Avanza Bank
Can any of the company-specific risk be diversified away by investing in both Swedbank and Avanza Bank 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 Avanza Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and Avanza Bank Holding, you can compare the effects of market volatilities on Swedbank and Avanza Bank 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 Avanza Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Avanza Bank.
Diversification Opportunities for Swedbank and Avanza Bank
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Swedbank and Avanza is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Avanza Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanza Bank Holding 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 Avanza Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanza Bank Holding has no effect on the direction of Swedbank i.e., Swedbank and Avanza Bank go up and down completely randomly.
Pair Corralation between Swedbank and Avanza Bank
Assuming the 90 days trading horizon Swedbank AB is expected to under-perform the Avanza Bank. But the stock apears to be less risky and, when comparing its historical volatility, Swedbank AB is 1.02 times less risky than Avanza Bank. The stock trades about -0.15 of its potential returns per unit of risk. The Avanza Bank Holding is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 22,610 in Avanza Bank Holding on August 28, 2024 and sell it today you would lose (610.00) from holding Avanza Bank Holding or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. Avanza Bank Holding
Performance |
| Timeline |
| Swedbank AB |
| Avanza Bank Holding |
Swedbank and Avanza Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Avanza Bank
The main advantage of trading using opposite Swedbank and Avanza Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Avanza Bank 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 Avanza Bank will offset losses from the drop in Avanza Bank's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Avanza Bank vs. Axfood AB | Avanza Bank vs. Samhllsbyggnadsbolaget i Norden | Avanza Bank vs. Castellum AB | Avanza Bank 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |