Correlation Between Swedbank Robur and Echiquier Entrepreneurs

Can any of the company-specific risk be diversified away by investing in both Swedbank Robur and Echiquier Entrepreneurs 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 Echiquier Entrepreneurs 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 Echiquier Entrepreneurs G, you can compare the effects of market volatilities on Swedbank Robur and Echiquier Entrepreneurs 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 Echiquier Entrepreneurs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank Robur and Echiquier Entrepreneurs.

Diversification Opportunities for Swedbank Robur and Echiquier Entrepreneurs

0.09

Correlation Coefficient

Swedbank Robur  Echiquier Entrepreneurs

Significant diversification

The 3 months correlation between Swedbank and Echiquier is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and Echiquier Entrepreneurs G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echiquier Entrepreneurs 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 Echiquier Entrepreneurs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echiquier Entrepreneurs has no effect on the direction of Swedbank Robur i.e., Swedbank Robur and Echiquier Entrepreneurs go up and down completely randomly.

Pair Corralation between Swedbank Robur and Echiquier Entrepreneurs

Assuming the 90 days trading horizon Swedbank Robur Corporate is expected to generate 0.26 times more return on investment than Echiquier Entrepreneurs. However, Swedbank Robur Corporate is 3.84 times less risky than Echiquier Entrepreneurs. It trades about 0.11 of its potential returns per unit of risk. Echiquier Entrepreneurs G is currently generating about -0.01 per unit of risk. If you would invest  965.00  in Swedbank Robur Corporate on October 7, 2024 and sell it today you would earn a total of  10.00  from holding Swedbank Robur Corporate or generate 1.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Swedbank Robur Corporate  vs.  Echiquier Entrepreneurs G

Swedbank Robur Corporate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 8 (%) 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 current stock price disarray, may contribute to short-term losses for the investors.

Echiquier Entrepreneurs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Echiquier Entrepreneurs G has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Echiquier Entrepreneurs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Swedbank Robur and Echiquier Entrepreneurs

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

The idea behind Swedbank Robur Corporate and Echiquier Entrepreneurs G 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.