Correlation Between TF Bank and Swedbank
Can any of the company-specific risk be diversified away by investing in both TF Bank and Swedbank 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 TF Bank and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TF Bank AB and Swedbank AB, you can compare the effects of market volatilities on TF Bank and Swedbank 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 TF Bank with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TF Bank and Swedbank.
Diversification Opportunities for TF Bank and Swedbank
Good diversification
The 3 months correlation between TFBANK and Swedbank is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding TF Bank AB and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and TF Bank 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 TF Bank AB are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of TF Bank i.e., TF Bank and Swedbank go up and down completely randomly.
Pair Corralation between TF Bank and Swedbank
Assuming the 90 days trading horizon TF Bank AB is expected to generate 1.22 times more return on investment than Swedbank. However, TF Bank is 1.22 times more volatile than Swedbank AB. It trades about -0.01 of its potential returns per unit of risk. Swedbank AB is currently generating about -0.05 per unit of risk. If you would invest 31,900 in TF Bank AB on August 24, 2024 and sell it today you would lose (200.00) from holding TF Bank AB or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TF Bank AB vs. Swedbank AB
Performance |
| Timeline |
| TF Bank AB |
| Swedbank AB |
TF Bank and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TF Bank and Swedbank
The main advantage of trading using opposite TF Bank and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TF Bank position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| TF Bank vs. Bure Equity AB | TF Bank vs. Creades AB | TF Bank vs. L E Lundbergfretagen | TF Bank vs. Industrivarden AB ser |
| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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