Correlation Between Swedbank and Elekta AB
Can any of the company-specific risk be diversified away by investing in both Swedbank and Elekta AB 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 Elekta AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and Elekta AB, you can compare the effects of market volatilities on Swedbank and Elekta AB 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 Elekta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Elekta AB.
Diversification Opportunities for Swedbank and Elekta AB
Excellent diversification
The 3 months correlation between Swedbank and Elekta is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Elekta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elekta 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 Elekta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elekta AB has no effect on the direction of Swedbank i.e., Swedbank and Elekta AB go up and down completely randomly.
Pair Corralation between Swedbank and Elekta AB
Assuming the 90 days trading horizon Swedbank AB is expected to under-perform the Elekta AB. But the stock apears to be less risky and, when comparing its historical volatility, Swedbank AB is 1.63 times less risky than Elekta AB. The stock trades about -0.18 of its potential returns per unit of risk. The Elekta AB is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 6,670 in Elekta AB on August 30, 2024 and sell it today you would lose (200.00) from holding Elekta AB or give up 3.0% 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. Elekta AB
Performance |
| Timeline |
| Swedbank AB |
| Elekta AB |
Swedbank and Elekta AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Elekta AB
The main advantage of trading using opposite Swedbank and Elekta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Elekta AB 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 Elekta AB will offset losses from the drop in Elekta AB's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Elekta AB vs. Getinge AB ser | Elekta AB vs. AB SKF | Elekta AB vs. ASSA ABLOY AB | Elekta AB vs. Husqvarna 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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