Correlation Between SILEON AB and Adobe

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

By analyzing existing cross correlation between SILEON AB ON and Adobe Inc, you can compare the effects of market volatilities on SILEON AB and Adobe 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 SILEON AB with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of SILEON AB and Adobe.

Diversification Opportunities for SILEON AB and Adobe

0.01

Correlation Coefficient

SILEON AB  Adobe

Significant diversification

The 3 months correlation between SILEON and Adobe is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SILEON AB ON and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and SILEON AB 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 SILEON AB ON are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of SILEON AB i.e., SILEON AB and Adobe go up and down completely randomly.

Pair Corralation between SILEON AB and Adobe

Assuming the 90 days trading horizon SILEON AB ON is expected to generate 164.54 times more return on investment than Adobe. However, SILEON AB is 164.54 times more volatile than Adobe Inc. It trades about 0.43 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.03 per unit of risk. If you would invest  1.00  in SILEON AB ON on September 26, 2024 and sell it today you would earn a total of  53.00  from holding SILEON AB ON or generate 5300.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SILEON AB ON  vs.  Adobe Inc

SILEON AB ON

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SILEON AB ON are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SILEON AB reported solid returns over the last few months and may actually be approaching a breakup point.

Adobe Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Adobe is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SILEON AB and Adobe

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

The idea behind SILEON AB ON and Adobe Inc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.