Correlation Between SaveLend Group and Svenska Handelsbanken

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Can any of the company-specific risk be diversified away by investing in both SaveLend Group and Svenska Handelsbanken 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 SaveLend Group and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SaveLend Group AB and Svenska Handelsbanken AB, you can compare the effects of market volatilities on SaveLend Group and Svenska Handelsbanken 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 SaveLend Group with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of SaveLend Group and Svenska Handelsbanken.

Diversification Opportunities for SaveLend Group and Svenska Handelsbanken

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between SaveLend and Svenska is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SaveLend Group AB and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and SaveLend Group 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 SaveLend Group AB are associated (or correlated) with Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of SaveLend Group i.e., SaveLend Group and Svenska Handelsbanken go up and down completely randomly.

Pair Corralation between SaveLend Group and Svenska Handelsbanken

Assuming the 90 days trading horizon SaveLend Group AB is expected to under-perform the Svenska Handelsbanken. In addition to that, SaveLend Group is 3.64 times more volatile than Svenska Handelsbanken AB. It trades about -0.06 of its total potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.06 per unit of volatility. If you would invest  14,650  in Svenska Handelsbanken AB on September 12, 2024 and sell it today you would earn a total of  180.00  from holding Svenska Handelsbanken AB or generate 1.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SaveLend Group AB  vs.  Svenska Handelsbanken AB

 Performance 
       Timeline  
SaveLend Group AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SaveLend Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SaveLend Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Svenska Handelsbanken 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Svenska Handelsbanken may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SaveLend Group and Svenska Handelsbanken Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SaveLend Group and Svenska Handelsbanken

The main advantage of trading using opposite SaveLend Group and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SaveLend Group position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.
The idea behind SaveLend Group AB and Svenska Handelsbanken AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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