Correlation Between Swedbank and Maven Wireless
Can any of the company-specific risk be diversified away by investing in both Swedbank and Maven Wireless 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 Maven Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and Maven Wireless Sweden, you can compare the effects of market volatilities on Swedbank and Maven Wireless 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 Maven Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Maven Wireless.
Diversification Opportunities for Swedbank and Maven Wireless
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swedbank and Maven is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden 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 Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of Swedbank i.e., Swedbank and Maven Wireless go up and down completely randomly.
Pair Corralation between Swedbank and Maven Wireless
Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.4 times more return on investment than Maven Wireless. However, Swedbank AB is 2.5 times less risky than Maven Wireless. It trades about -0.17 of its potential returns per unit of risk. Maven Wireless Sweden is currently generating about -0.15 per unit of risk. If you would invest 21,820 in Swedbank AB on August 29, 2024 and sell it today you would lose (880.00) from holding Swedbank AB or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. Maven Wireless Sweden
Performance |
| Timeline |
| Swedbank AB |
| Maven Wireless Sweden |
Swedbank and Maven Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Maven Wireless
The main advantage of trading using opposite Swedbank and Maven Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Maven Wireless 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 Maven Wireless will offset losses from the drop in Maven Wireless' long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Maven Wireless vs. Lidds AB | Maven Wireless vs. Serstech AB | Maven Wireless vs. Transtema Group AB | Maven Wireless vs. Enorama Pharma 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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