Correlation Between Swedbank and Vef AB
Can any of the company-specific risk be diversified away by investing in both Swedbank and Vef 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 Vef 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 Vef AB, you can compare the effects of market volatilities on Swedbank and Vef 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 Vef AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Vef AB.
Diversification Opportunities for Swedbank and Vef AB
Excellent diversification
The 3 months correlation between Swedbank and Vef is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Vef AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vef 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 Vef AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vef AB has no effect on the direction of Swedbank i.e., Swedbank and Vef AB go up and down completely randomly.
Pair Corralation between Swedbank and Vef AB
Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.56 times more return on investment than Vef AB. However, Swedbank AB is 1.78 times less risky than Vef AB. It trades about 0.0 of its potential returns per unit of risk. Vef AB is currently generating about -0.07 per unit of risk. If you would invest 21,480 in Swedbank AB on September 3, 2024 and sell it today you would lose (100.00) from holding Swedbank AB or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. Vef AB
Performance |
| Timeline |
| Swedbank AB |
| Vef AB |
Swedbank and Vef AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Vef AB
The main advantage of trading using opposite Swedbank and Vef AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Vef 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 Vef AB will offset losses from the drop in Vef AB's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Vef AB vs. L E Lundbergfretagen | Vef AB vs. Industrivarden AB ser | Vef AB vs. Svenska Handelsbanken AB | Vef AB vs. Investment AB Latour |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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