Correlation Between Swedbank and CellaVision
Can any of the company-specific risk be diversified away by investing in both Swedbank and CellaVision 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 CellaVision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and CellaVision AB, you can compare the effects of market volatilities on Swedbank and CellaVision 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 CellaVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and CellaVision.
Diversification Opportunities for Swedbank and CellaVision
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swedbank and CellaVision is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision 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 CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Swedbank i.e., Swedbank and CellaVision go up and down completely randomly.
Pair Corralation between Swedbank and CellaVision
Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.52 times more return on investment than CellaVision. However, Swedbank AB is 1.93 times less risky than CellaVision. It trades about -0.05 of its potential returns per unit of risk. CellaVision AB is currently generating about -0.45 per unit of risk. If you would invest 21,800 in Swedbank AB on August 24, 2024 and sell it today you would lose (320.00) from holding Swedbank AB or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. CellaVision AB
Performance |
| Timeline |
| Swedbank AB |
| CellaVision AB |
Swedbank and CellaVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and CellaVision
The main advantage of trading using opposite Swedbank and CellaVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, CellaVision 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 CellaVision will offset losses from the drop in CellaVision's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| CellaVision vs. Vitrolife AB | CellaVision vs. Biotage AB | CellaVision vs. Sectra AB | CellaVision vs. BioGaia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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