Correlation Between Swedbank and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Swedbank and NextCell Pharma 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 NextCell Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and NextCell Pharma AB, you can compare the effects of market volatilities on Swedbank and NextCell Pharma 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 NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and NextCell Pharma.
Diversification Opportunities for Swedbank and NextCell Pharma
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swedbank and NextCell is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and NextCell Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCell Pharma 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 NextCell Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCell Pharma AB has no effect on the direction of Swedbank i.e., Swedbank and NextCell Pharma go up and down completely randomly.
Pair Corralation between Swedbank and NextCell Pharma
Assuming the 90 days trading horizon Swedbank AB is expected to under-perform the NextCell Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Swedbank AB is 1.63 times less risky than NextCell Pharma. The stock trades about -0.04 of its potential returns per unit of risk. The NextCell Pharma AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 173.00 in NextCell Pharma AB on September 1, 2024 and sell it today you would earn a total of 2.00 from holding NextCell Pharma AB or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Swedbank AB vs. NextCell Pharma AB
Performance |
| Timeline |
| Swedbank AB |
| NextCell Pharma AB |
Swedbank and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and NextCell Pharma
The main advantage of trading using opposite Swedbank and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, NextCell Pharma 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 NextCell Pharma will offset losses from the drop in NextCell Pharma's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| NextCell Pharma vs. Diamyd Medical AB | NextCell Pharma vs. Mendus AB | NextCell Pharma vs. Vicore Pharma Holding | NextCell Pharma vs. Immunovia publ 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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