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

-0.72

Correlation Coefficient

Sdiptech  Skanska AB

Pay attention - limited upside

The 3 months correlation between Sdiptech and Skanska is -0.72. 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 -0.21 of its total potential returns per unit of risk. Skanska AB is currently generating about 0.22 per unit of volatility. If you would invest  20,200  in Skanska AB on September 10, 2024 and sell it today you would earn a total of  3,320  from holding Skanska AB or generate 16.44% 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

Sdiptech AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sdiptech 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 forward 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.

Skanska AB

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Skanska AB are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Skanska AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind Sdiptech AB and Skanska 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..