Correlation Between Swedbank Robur and Allianz Clean

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

Diversification Opportunities for Swedbank Robur and Allianz Clean

0.27

Correlation Coefficient

Swedbank Robur  Allianz Clean

Modest diversification

The 3 months correlation between Swedbank and Allianz is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and Allianz Clean Planet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz Clean Planet 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 Allianz Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz Clean Planet has no effect on the direction of Swedbank Robur i.e., Swedbank Robur and Allianz Clean go up and down completely randomly.

Pair Corralation between Swedbank Robur and Allianz Clean

Assuming the 90 days trading horizon Swedbank Robur Corporate is expected to generate 0.27 times more return on investment than Allianz Clean. However, Swedbank Robur Corporate is 3.68 times less risky than Allianz Clean. It trades about 0.01 of its potential returns per unit of risk. Allianz Clean Planet is currently generating about -0.08 per unit of risk. If you would invest  976.00  in Swedbank Robur Corporate on December 28, 2024 and sell it today you would earn a total of  1.00  from holding Swedbank Robur Corporate or generate 0.1% return on investment over 90 days.

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

Swedbank Robur Corporate  vs.  Allianz Clean Planet

Swedbank Robur Corporate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Swedbank Robur Corporate has generated negative risk-adjusted returns adding no value to fund investors. 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.

Allianz Clean Planet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianz Clean Planet has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Allianz Clean is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Swedbank Robur and Allianz Clean

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

The idea behind Swedbank Robur Corporate and Allianz Clean Planet 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.