Correlation Between Wallenstam and SBB-D
Can any of the company-specific risk be diversified away by investing in both Wallenstam and SBB-D 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 Wallenstam and SBB-D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallenstam AB and Samhaellsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Wallenstam and SBB-D 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 Wallenstam with a short position of SBB-D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallenstam and SBB-D.
Diversification Opportunities for Wallenstam and SBB-D
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wallenstam and SBB-D is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Wallenstam AB and Samhaellsbyggnadsbolaget i Nor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhaellsbyggnadsbol and Wallenstam 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 Wallenstam AB are associated (or correlated) with SBB-D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhaellsbyggnadsbol has no effect on the direction of Wallenstam i.e., Wallenstam and SBB-D go up and down completely randomly.
Pair Corralation between Wallenstam and SBB-D
Assuming the 90 days trading horizon Wallenstam AB is expected to generate 0.36 times more return on investment than SBB-D. However, Wallenstam AB is 2.81 times less risky than SBB-D. It trades about 0.04 of its potential returns per unit of risk. Samhaellsbyggnadsbolaget i Norden is currently generating about -0.01 per unit of risk. If you would invest 3,792 in Wallenstam AB on August 24, 2024 and sell it today you would earn a total of 1,140 from holding Wallenstam AB or generate 30.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallenstam AB vs. Samhaellsbyggnadsbolaget i Nor
Performance |
| Timeline |
| Wallenstam AB |
| Samhaellsbyggnadsbol |
Wallenstam and SBB-D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallenstam and SBB-D
The main advantage of trading using opposite Wallenstam and SBB-D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallenstam position performs unexpectedly, SBB-D 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-D will offset losses from the drop in SBB-D's long position.| Wallenstam vs. Hufvudstaden AB | Wallenstam vs. Fabege AB | Wallenstam vs. Wihlborgs Fastigheter AB | Wallenstam vs. Fastighets AB Balder |
| SBB-D vs. Samhllsbyggnadsbolaget i Norden | SBB-D vs. Castellum AB | SBB-D vs. Cibus Nordic Real | SBB-D vs. AB Sagax |
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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