Correlation Between SBB-B and Thunderful Group

Can any of the company-specific risk be diversified away by investing in both SBB-B and Thunderful Group 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 Thunderful Group 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 Thunderful Group AB, you can compare the effects of market volatilities on SBB-B and Thunderful Group 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 Thunderful Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Thunderful Group.

Diversification Opportunities for SBB-B and Thunderful Group

0.77

Correlation Coefficient

SBB-B  Thunderful Group

Poor diversification

The 3 months correlation between SBB-B and Thunderful is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Thunderful Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderful 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 Thunderful Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderful Group has no effect on the direction of SBB-B i.e., SBB-B and Thunderful Group go up and down completely randomly.

Pair Corralation between SBB-B and Thunderful Group

Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to generate 1.31 times more return on investment than Thunderful Group. However, SBB-B is 1.31 times more volatile than Thunderful Group AB. It trades about -0.15 of its potential returns per unit of risk. Thunderful Group AB is currently generating about -0.21 per unit of risk. If you would invest  772.00  in Samhllsbyggnadsbolaget i Norden on September 26, 2024 and sell it today you would lose (339.00) from holding Samhllsbyggnadsbolaget i Norden or give up 43.91% of portfolio value over 90 days.

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

Samhllsbyggnadsbolaget i Norde  vs.  Thunderful Group AB

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.

Thunderful Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SBB-B and Thunderful Group

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

The idea behind Samhllsbyggnadsbolaget i Norden and Thunderful Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.