Correlation Between Tele2 AB and SBB-B
Can any of the company-specific risk be diversified away by investing in both Tele2 AB and SBB-B 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 Tele2 AB and SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tele2 AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Tele2 AB and SBB-B 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 Tele2 AB with a short position of SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and SBB-B.
Diversification Opportunities for Tele2 AB and SBB-B
Significant diversification
The 3 months correlation between Tele2 and SBB-B is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget and Tele2 AB 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 Tele2 AB are associated (or correlated) with SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Tele2 AB i.e., Tele2 AB and SBB-B go up and down completely randomly.
Pair Corralation between Tele2 AB and SBB-B
Assuming the 90 days trading horizon Tele2 AB is expected to generate 2.09 times less return on investment than SBB-B. But when comparing it to its historical volatility, Tele2 AB is 2.24 times less risky than SBB-B. It trades about 0.42 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 432.00 in Samhllsbyggnadsbolaget i Norden on November 5, 2024 and sell it today you would earn a total of 131.00 from holding Samhllsbyggnadsbolaget i Norden or generate 30.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tele2 AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Tele2 AB |
| Samhllsbyggnadsbolaget |
Tele2 AB and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tele2 AB and SBB-B
The main advantage of trading using opposite Tele2 AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.| Tele2 AB vs. Telia Company AB | Tele2 AB vs. Skanska AB | Tele2 AB vs. AB Electrolux | Tele2 AB vs. Svenska Handelsbanken 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |