Correlation Between Sdiptech and Skanska AB
Can any of the company-specific risk be diversified away by investing in both Sdiptech and Skanska 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 Sdiptech and Skanska AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sdiptech AB and Skanska AB, you can compare the effects of market volatilities on Sdiptech and Skanska 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 Sdiptech with a short position of Skanska AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sdiptech and Skanska AB.
Diversification Opportunities for Sdiptech and Skanska AB
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sdiptech and Skanska is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and Skanska AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skanska AB and Sdiptech 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 Sdiptech AB are associated (or correlated) with Skanska AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skanska AB has no effect on the direction of Sdiptech i.e., Sdiptech and Skanska AB go up and down completely randomly.
Pair Corralation between Sdiptech and Skanska AB
Assuming the 90 days trading horizon Sdiptech AB is expected to under-perform the Skanska AB. In addition to that, Sdiptech is 1.79 times more volatile than Skanska AB. It trades about -0.22 of its total potential returns per unit of risk. Skanska AB is currently generating about 0.23 per unit of volatility. If you would invest 20,130 in Skanska AB on September 8, 2024 and sell it today you would earn a total of 3,390 from holding Skanska AB or generate 16.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sdiptech AB vs. Skanska AB
Performance |
Timeline |
Sdiptech AB |
Skanska AB |
Sdiptech and Skanska AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sdiptech and Skanska AB
The main advantage of trading using opposite Sdiptech and Skanska AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sdiptech position performs unexpectedly, Skanska 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 Skanska AB will offset losses from the drop in Skanska AB's long position.Sdiptech vs. Bergman Beving AB | Sdiptech vs. FM Mattsson Mora | Sdiptech vs. Systemair AB | Sdiptech vs. Rejlers AB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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