Correlation Between Mantex AB and Sandvik AB

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

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

Diversification Opportunities for Mantex AB and Sandvik AB

-0.5

Correlation Coefficient

Mantex AB  Sandvik AB

Very good diversification

The 3 months correlation between Mantex and Sandvik is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mantex AB and Sandvik AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandvik AB and Mantex 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 Mantex AB are associated (or correlated) with Sandvik AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandvik AB has no effect on the direction of Mantex AB i.e., Mantex AB and Sandvik AB go up and down completely randomly.

Pair Corralation between Mantex AB and Sandvik AB

Assuming the 90 days trading horizon Mantex AB is expected to under-perform the Sandvik AB. In addition to that, Mantex AB is 2.28 times more volatile than Sandvik AB. It trades about -0.12 of its total potential returns per unit of risk. Sandvik AB is currently generating about 0.13 per unit of volatility. If you would invest  19,965  in Sandvik AB on December 24, 2024 and sell it today you would earn a total of  2,845  from holding Sandvik AB or generate 14.25% return on investment over 90 days.

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

Mantex AB  vs.  Sandvik AB

Mantex AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mantex AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sandvik AB

Risk-Adjusted Performance

OK

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

Pair Trading with Mantex AB and Sandvik AB

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

The idea behind Mantex AB and Sandvik 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.