Correlation Between SaveLend Group and TF Bank
Can any of the company-specific risk be diversified away by investing in both SaveLend Group and TF Bank 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 TF Bank 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 TF Bank AB, you can compare the effects of market volatilities on SaveLend Group and TF Bank 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 TF Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SaveLend Group and TF Bank.
Diversification Opportunities for SaveLend Group and TF Bank
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SaveLend and TFBANK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SaveLend Group AB and TF Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TF Bank AB 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 TF Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TF Bank AB has no effect on the direction of SaveLend Group i.e., SaveLend Group and TF Bank go up and down completely randomly.
Pair Corralation between SaveLend Group and TF Bank
Assuming the 90 days trading horizon SaveLend Group AB is expected to under-perform the TF Bank. In addition to that, SaveLend Group is 1.72 times more volatile than TF Bank AB. It trades about -0.06 of its total potential returns per unit of risk. TF Bank AB is currently generating about 0.18 per unit of volatility. If you would invest 32,400 in TF Bank AB on September 12, 2024 and sell it today you would earn a total of 2,900 from holding TF Bank AB or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SaveLend Group AB vs. TF Bank AB
Performance |
| Timeline |
| SaveLend Group AB |
| TF Bank AB |
SaveLend Group and TF Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SaveLend Group and TF Bank
The main advantage of trading using opposite SaveLend Group and TF Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SaveLend Group position performs unexpectedly, TF Bank 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 TF Bank will offset losses from the drop in TF Bank's long position.| SaveLend Group vs. Smart Eye AB | SaveLend Group vs. Nepa AB | SaveLend Group vs. MAG Interactive AB | SaveLend Group vs. Hexatronic Group AB |
| TF Bank vs. Koninklijke Heijmans NV | TF Bank vs. Trelleborg AB | TF Bank vs. Ferronordic AB | TF Bank vs. KABE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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