Correlation Between Trelleborg and Essity AB
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By analyzing existing cross correlation between Trelleborg AB and Essity AB, you can compare the effects of market volatilities on Trelleborg and Essity 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 Trelleborg with a short position of Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trelleborg and Essity AB.
Diversification Opportunities for Trelleborg and Essity AB
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trelleborg and Essity is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Trelleborg AB and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB and Trelleborg 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 Trelleborg AB are associated (or correlated) with Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of Trelleborg i.e., Trelleborg and Essity AB go up and down completely randomly.
Pair Corralation between Trelleborg and Essity AB
Assuming the 90 days trading horizon Trelleborg AB is expected to generate 0.73 times more return on investment than Essity AB. However, Trelleborg AB is 1.37 times less risky than Essity AB. It trades about 0.33 of its potential returns per unit of risk. Essity AB is currently generating about -0.14 per unit of risk. If you would invest 38,300 in Trelleborg AB on November 3, 2024 and sell it today you would earn a total of 3,600 from holding Trelleborg AB or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trelleborg AB vs. Essity AB
Performance |
| Timeline |
| Trelleborg AB |
| Essity AB |
Trelleborg and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trelleborg and Essity AB
The main advantage of trading using opposite Trelleborg and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trelleborg position performs unexpectedly, Essity 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 Essity AB will offset losses from the drop in Essity AB's long position.| Trelleborg vs. AB SKF | Trelleborg vs. Sandvik AB | Trelleborg vs. Alfa Laval AB | Trelleborg vs. Husqvarna AB |
| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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