Correlation Between Wallenstam and Sinch AB
Can any of the company-specific risk be diversified away by investing in both Wallenstam and Sinch 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 Wallenstam and Sinch AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallenstam AB and Sinch AB, you can compare the effects of market volatilities on Wallenstam and Sinch 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 Wallenstam with a short position of Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallenstam and Sinch AB.
Diversification Opportunities for Wallenstam and Sinch AB
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wallenstam and Sinch is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wallenstam AB and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch AB 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 Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of Wallenstam i.e., Wallenstam and Sinch AB go up and down completely randomly.
Pair Corralation between Wallenstam and Sinch AB
Assuming the 90 days trading horizon Wallenstam AB is expected to under-perform the Sinch AB. But the stock apears to be less risky and, when comparing its historical volatility, Wallenstam AB is 1.46 times less risky than Sinch AB. The stock trades about -0.1 of its potential returns per unit of risk. The Sinch AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,181 in Sinch AB on September 12, 2024 and sell it today you would lose (42.00) from holding Sinch AB or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallenstam AB vs. Sinch AB
Performance |
| Timeline |
| Wallenstam AB |
| Sinch AB |
Wallenstam and Sinch AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallenstam and Sinch AB
The main advantage of trading using opposite Wallenstam and Sinch AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallenstam position performs unexpectedly, Sinch 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 Sinch AB will offset losses from the drop in Sinch AB's long position.| Wallenstam vs. Sinch AB | Wallenstam vs. Embracer Group AB | Wallenstam vs. Investor AB ser | Wallenstam vs. Castellum AB |
| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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