Correlation Between W5 Solutions and Saab AB
Can any of the company-specific risk be diversified away by investing in both W5 Solutions and Saab 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 W5 Solutions and Saab AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between W5 Solutions AB and Saab AB, you can compare the effects of market volatilities on W5 Solutions and Saab 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 W5 Solutions with a short position of Saab AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of W5 Solutions and Saab AB.
Diversification Opportunities for W5 Solutions and Saab AB
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between W5 Solutions and Saab is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding W5 Solutions AB and Saab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saab AB and W5 Solutions 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 W5 Solutions AB are associated (or correlated) with Saab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saab AB has no effect on the direction of W5 Solutions i.e., W5 Solutions and Saab AB go up and down completely randomly.
Pair Corralation between W5 Solutions and Saab AB
Assuming the 90 days horizon W5 Solutions AB is expected to under-perform the Saab AB. In addition to that, W5 Solutions is 1.38 times more volatile than Saab AB. It trades about -0.02 of its total potential returns per unit of risk. Saab AB is currently generating about 0.03 per unit of volatility. If you would invest 22,700 in Saab AB on November 2, 2024 and sell it today you would earn a total of 760.00 from holding Saab AB or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.03% |
| Values | Daily Returns |
W5 Solutions AB vs. Saab AB
Performance |
| Timeline |
| W5 Solutions AB |
| Saab AB |
W5 Solutions and Saab AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with W5 Solutions and Saab AB
The main advantage of trading using opposite W5 Solutions and Saab AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W5 Solutions position performs unexpectedly, Saab 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 Saab AB will offset losses from the drop in Saab AB's long position.| W5 Solutions vs. AroCell AB | W5 Solutions vs. aXichem AB | W5 Solutions vs. Gaming Corps AB | W5 Solutions vs. Cantargia AB |
| Saab AB vs. SSAB AB | Saab AB vs. Boliden AB | Saab AB vs. Sandvik AB | Saab AB vs. Telefonaktiebolaget LM Ericsson |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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