Correlation Between Swedbank and Minesto AB
Can any of the company-specific risk be diversified away by investing in both Swedbank and Minesto 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 Minesto 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 Minesto AB, you can compare the effects of market volatilities on Swedbank and Minesto 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 Minesto AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Minesto AB.
Diversification Opportunities for Swedbank and Minesto AB
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swedbank and Minesto is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Minesto AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minesto 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 Minesto AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minesto AB has no effect on the direction of Swedbank i.e., Swedbank and Minesto AB go up and down completely randomly.
Pair Corralation between Swedbank and Minesto AB
Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.28 times more return on investment than Minesto AB. However, Swedbank AB is 3.54 times less risky than Minesto AB. It trades about 0.06 of its potential returns per unit of risk. Minesto AB is currently generating about -0.03 per unit of risk. If you would invest 15,039 in Swedbank AB on August 26, 2024 and sell it today you would earn a total of 6,251 from holding Swedbank AB or generate 41.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. Minesto AB
Performance |
| Timeline |
| Swedbank AB |
| Minesto AB |
Swedbank and Minesto AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Minesto AB
The main advantage of trading using opposite Swedbank and Minesto AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Minesto 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 Minesto AB will offset losses from the drop in Minesto AB's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Minesto AB vs. SolTech Energy Sweden | Minesto AB vs. Eolus Vind AB | Minesto AB vs. Climeon AB | Minesto AB vs. Powercell Sweden |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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