Correlation Between Swedbank and Eniro AB
Can any of the company-specific risk be diversified away by investing in both Swedbank and Eniro 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 Eniro 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 Eniro AB, you can compare the effects of market volatilities on Swedbank and Eniro 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 Eniro AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Eniro AB.
Diversification Opportunities for Swedbank and Eniro AB
Good diversification
The 3 months correlation between Swedbank and Eniro is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Eniro AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eniro 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 Eniro AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eniro AB has no effect on the direction of Swedbank i.e., Swedbank and Eniro AB go up and down completely randomly.
Pair Corralation between Swedbank and Eniro AB
Assuming the 90 days trading horizon Swedbank AB is expected to under-perform the Eniro AB. But the stock apears to be less risky and, when comparing its historical volatility, Swedbank AB is 2.87 times less risky than Eniro AB. The stock trades about -0.07 of its potential returns per unit of risk. The Eniro AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Eniro AB on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Eniro AB or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. Eniro AB
Performance |
| Timeline |
| Swedbank AB |
| Eniro AB |
Swedbank and Eniro AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Eniro AB
The main advantage of trading using opposite Swedbank and Eniro AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Eniro 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 Eniro AB will offset losses from the drop in Eniro AB's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Eniro AB vs. Tele2 AB | Eniro AB vs. Swedbank AB | Eniro AB vs. Svenska Handelsbanken AB | Eniro AB vs. Nordea Bank Abp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |