Correlation Between Swedbank Robur and R Co

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

Diversification Opportunities for Swedbank Robur and R Co

0.74

Correlation Coefficient

Swedbank Robur  R Co

Poor diversification

The 3 months correlation between Swedbank and 0P00017SX2 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and R co Valor F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on R co Valor 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 R Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of R co Valor has no effect on the direction of Swedbank Robur i.e., Swedbank Robur and R Co go up and down completely randomly.

Pair Corralation between Swedbank Robur and R Co

Assuming the 90 days trading horizon Swedbank Robur Corporate is expected to generate 0.25 times more return on investment than R Co. However, Swedbank Robur Corporate is 4.06 times less risky than R Co. It trades about 0.22 of its potential returns per unit of risk. R co Valor F is currently generating about -0.09 per unit of risk. If you would invest  971.00  in Swedbank Robur Corporate on September 22, 2024 and sell it today you would earn a total of  8.00  from holding Swedbank Robur Corporate or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Swedbank Robur Corporate  vs.  R co Valor F

Swedbank Robur Corporate

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 11 (%) 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.

R co Valor

Risk-Adjusted Performance

10 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in R co Valor F are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, R Co is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Swedbank Robur and R Co

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

The idea behind Swedbank Robur Corporate and R co Valor F 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.