Correlation Between Swedbank Robur and IE00B0H4TS55

Can any of the company-specific risk be diversified away by investing in both Swedbank Robur and IE00B0H4TS55 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 Swedbank Robur and IE00B0H4TS55 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Swedbank Robur Corporate and IE00B0H4TS55, you can compare the effects of market volatilities on Swedbank Robur and IE00B0H4TS55 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 Swedbank Robur with a short position of IE00B0H4TS55. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank Robur and IE00B0H4TS55.

Diversification Opportunities for Swedbank Robur and IE00B0H4TS55

-0.15

Correlation Coefficient

Swedbank Robur  IE00B0H4TS55

Good diversification

The 3 months correlation between Swedbank and IE00B0H4TS55 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and IE00B0H4TS55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IE00B0H4TS55 and Swedbank Robur 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 Swedbank Robur Corporate are associated (or correlated) with IE00B0H4TS55. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IE00B0H4TS55 has no effect on the direction of Swedbank Robur i.e., Swedbank Robur and IE00B0H4TS55 go up and down completely randomly.

Pair Corralation between Swedbank Robur and IE00B0H4TS55

Assuming the 90 days trading horizon Swedbank Robur Corporate is expected to generate 0.78 times more return on investment than IE00B0H4TS55. However, Swedbank Robur Corporate is 1.28 times less risky than IE00B0H4TS55. It trades about 0.13 of its potential returns per unit of risk. IE00B0H4TS55 is currently generating about -0.16 per unit of risk. If you would invest  965.00  in Swedbank Robur Corporate on September 24, 2024 and sell it today you would earn a total of  14.00  from holding Swedbank Robur Corporate or generate 1.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Swedbank Robur Corporate  vs.  IE00B0H4TS55

Swedbank Robur Corporate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Swedbank Robur is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

IE00B0H4TS55

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IE00B0H4TS55 has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, IE00B0H4TS55 is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Swedbank Robur and IE00B0H4TS55

The main advantage of trading using opposite Swedbank Robur and IE00B0H4TS55 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank Robur position performs unexpectedly, IE00B0H4TS55 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 IE00B0H4TS55 will offset losses from the drop in IE00B0H4TS55's long position.

The idea behind Swedbank Robur Corporate and IE00B0H4TS55 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.