Correlation Between Swedbank and BE Group
Can any of the company-specific risk be diversified away by investing in both Swedbank and BE Group 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 BE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and BE Group AB, you can compare the effects of market volatilities on Swedbank and BE Group 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 BE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and BE Group.
Diversification Opportunities for Swedbank and BE Group
Very good diversification
The 3 months correlation between Swedbank and BEGR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and BE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Group AB 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 BE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Group AB has no effect on the direction of Swedbank i.e., Swedbank and BE Group go up and down completely randomly.
Pair Corralation between Swedbank and BE Group
Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.7 times more return on investment than BE Group. However, Swedbank AB is 1.42 times less risky than BE Group. It trades about -0.04 of its potential returns per unit of risk. BE Group AB is currently generating about -0.16 per unit of risk. If you would invest 21,830 in Swedbank AB on September 19, 2024 and sell it today you would lose (210.00) from holding Swedbank AB or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Swedbank AB vs. BE Group AB
Performance |
| Timeline |
| Swedbank AB |
| BE Group AB |
Swedbank and BE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and BE Group
The main advantage of trading using opposite Swedbank and BE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, BE Group 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 BE Group will offset losses from the drop in BE Group's long position.| Swedbank vs. Nordea Bank Abp | Swedbank vs. Skandinaviska Enskilda Banken | Swedbank vs. Avanza Bank Holding | Swedbank vs. Arion banki hf |
| BE Group vs. Skandinaviska Enskilda Banken | BE Group vs. Skandinaviska Enskilda Banken | BE Group vs. Swedbank AB | BE Group vs. Svenska Handelsbanken 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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