Correlation Between Swedbank and Realfiction Holding
Can any of the company-specific risk be diversified away by investing in both Swedbank and Realfiction Holding 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 Realfiction Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and Realfiction Holding AB, you can compare the effects of market volatilities on Swedbank and Realfiction Holding 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 Realfiction Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Realfiction Holding.
Diversification Opportunities for Swedbank and Realfiction Holding
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Swedbank and Realfiction is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Realfiction Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realfiction Holding 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 Realfiction Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realfiction Holding has no effect on the direction of Swedbank i.e., Swedbank and Realfiction Holding go up and down completely randomly.
Pair Corralation between Swedbank and Realfiction Holding
Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.24 times more return on investment than Realfiction Holding. However, Swedbank AB is 4.24 times less risky than Realfiction Holding. It trades about 0.38 of its potential returns per unit of risk. Realfiction Holding AB is currently generating about -0.1 per unit of risk. If you would invest 21,030 in Swedbank AB on October 26, 2024 and sell it today you would earn a total of 3,640 from holding Swedbank AB or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Swedbank AB vs. Realfiction Holding AB
Performance |
| Timeline |
| Swedbank AB |
| Realfiction Holding |
Swedbank and Realfiction Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Realfiction Holding
The main advantage of trading using opposite Swedbank and Realfiction Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Realfiction Holding 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 Realfiction Holding will offset losses from the drop in Realfiction Holding's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Realfiction Holding vs. Sivers IMA Holding | Realfiction Holding vs. AAC Clyde Space | Realfiction Holding vs. Kancera AB | Realfiction Holding vs. Bambuser 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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