Correlation Between Svenska Cellulosa and Corticeira Amorim
Can any of the company-specific risk be diversified away by investing in both Svenska Cellulosa and Corticeira Amorim 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 Svenska Cellulosa and Corticeira Amorim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Cellulosa Aktiebolaget and Corticeira Amorim SGPS, you can compare the effects of market volatilities on Svenska Cellulosa and Corticeira Amorim 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 Svenska Cellulosa with a short position of Corticeira Amorim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Cellulosa and Corticeira Amorim.
Diversification Opportunities for Svenska Cellulosa and Corticeira Amorim
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svenska and Corticeira is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Cellulosa Aktiebolaget and Corticeira Amorim SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corticeira Amorim SGPS and Svenska Cellulosa 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 Svenska Cellulosa Aktiebolaget are associated (or correlated) with Corticeira Amorim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corticeira Amorim SGPS has no effect on the direction of Svenska Cellulosa i.e., Svenska Cellulosa and Corticeira Amorim go up and down completely randomly.
Pair Corralation between Svenska Cellulosa and Corticeira Amorim
Assuming the 90 days horizon Svenska Cellulosa Aktiebolaget is expected to under-perform the Corticeira Amorim. In addition to that, Svenska Cellulosa is 1.28 times more volatile than Corticeira Amorim SGPS. It trades about -0.25 of its total potential returns per unit of risk. Corticeira Amorim SGPS is currently generating about -0.24 per unit of volatility. If you would invest 835.00 in Corticeira Amorim SGPS on September 24, 2024 and sell it today you would lose (43.00) from holding Corticeira Amorim SGPS or give up 5.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Svenska Cellulosa Aktiebolaget vs. Corticeira Amorim SGPS
Performance |
Timeline |
Svenska Cellulosa |
Corticeira Amorim SGPS |
Svenska Cellulosa and Corticeira Amorim Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Svenska Cellulosa and Corticeira Amorim
The main advantage of trading using opposite Svenska Cellulosa and Corticeira Amorim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Cellulosa position performs unexpectedly, Corticeira Amorim 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 Corticeira Amorim will offset losses from the drop in Corticeira Amorim's long position.Svenska Cellulosa vs. PLAYMATES TOYS | Svenska Cellulosa vs. InterContinental Hotels Group | Svenska Cellulosa vs. DALATA HOTEL | Svenska Cellulosa vs. Pebblebrook Hotel Trust |
Corticeira Amorim vs. Svenska Cellulosa Aktiebolaget | Corticeira Amorim vs. SVENSKA CELLULO B | Corticeira Amorim vs. Svenska Cellulosa Aktiebolaget | Corticeira Amorim vs. West Fraser Timber |
Check out your portfolio center.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
CEOs Directory Screen CEOs from public companies around the world | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |