Correlation Between Abliva AB and Saniona AB

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

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

Diversification Opportunities for Abliva AB and Saniona AB

0.67

Correlation Coefficient

Abliva AB  Saniona AB

Poor diversification

The 3 months correlation between Abliva and Saniona is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Abliva AB and Saniona AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saniona AB and Abliva 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 Abliva AB are associated (or correlated) with Saniona AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saniona AB has no effect on the direction of Abliva AB i.e., Abliva AB and Saniona AB go up and down completely randomly.

Pair Corralation between Abliva AB and Saniona AB

Assuming the 90 days trading horizon Abliva AB is expected to generate 1.84 times more return on investment than Saniona AB. However, Abliva AB is 1.84 times more volatile than Saniona AB. It trades about 0.13 of its potential returns per unit of risk. Saniona AB is currently generating about 0.1 per unit of risk. If you would invest  16.00  in Abliva AB on October 25, 2024 and sell it today you would earn a total of  27.00  from holding Abliva AB or generate 168.75% return on investment over 90 days.

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

Abliva AB  vs.  Saniona AB

Abliva AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abliva AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Abliva AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Saniona AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abliva AB and Saniona AB

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

The idea behind Abliva AB and Saniona AB 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.