Correlation Between SBB-B and Alimak Hek

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

By analyzing existing cross correlation between Samhllsbyggnadsbolaget i Norden and Alimak Hek Group, you can compare the effects of market volatilities on SBB-B and Alimak Hek 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 SBB-B with a short position of Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Alimak Hek.

Diversification Opportunities for SBB-B and Alimak Hek

-0.44

Correlation Coefficient

SBB-B  Alimak Hek

Very good diversification

The 3 months correlation between SBB-B and Alimak is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and SBB-B 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 Samhllsbyggnadsbolaget i Norden are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of SBB-B i.e., SBB-B and Alimak Hek go up and down completely randomly.

Pair Corralation between SBB-B and Alimak Hek

Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to under-perform the Alimak Hek. In addition to that, SBB-B is 3.02 times more volatile than Alimak Hek Group. It trades about -0.03 of its total potential returns per unit of risk. Alimak Hek Group is currently generating about 0.01 per unit of volatility. If you would invest  11,280  in Alimak Hek Group on September 30, 2024 and sell it today you would earn a total of  60.00  from holding Alimak Hek Group or generate 0.53% return on investment over 90 days.

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

Samhllsbyggnadsbolaget i Norde  vs.  Alimak Hek Group

Samhllsbyggnadsbolaget

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samhllsbyggnadsbolaget i Norden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alimak Hek Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alimak Hek Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alimak Hek is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SBB-B and Alimak Hek

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

The idea behind Samhllsbyggnadsbolaget i Norden and Alimak Hek Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.