Correlation Between Svenska Handelsbanken and OptiCept Technologies

Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and OptiCept Technologies 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 Handelsbanken and OptiCept Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Svenska Handelsbanken AB and OptiCept Technologies AB, you can compare the effects of market volatilities on Svenska Handelsbanken and OptiCept Technologies 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 Handelsbanken with a short position of OptiCept Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and OptiCept Technologies.

Diversification Opportunities for Svenska Handelsbanken and OptiCept Technologies

-0.79

Correlation Coefficient

Svenska Handelsbanken  OptiCept Technologies

Pay attention - limited upside

The 3 months correlation between Svenska and OptiCept is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and OptiCept Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiCept Technologies and Svenska Handelsbanken 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 Handelsbanken AB are associated (or correlated) with OptiCept Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiCept Technologies has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and OptiCept Technologies go up and down completely randomly.

Pair Corralation between Svenska Handelsbanken and OptiCept Technologies

Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.22 times more return on investment than OptiCept Technologies. However, Svenska Handelsbanken AB is 4.47 times less risky than OptiCept Technologies. It trades about 0.05 of its potential returns per unit of risk. OptiCept Technologies AB is currently generating about 0.0 per unit of risk. If you would invest  11,727  in Svenska Handelsbanken AB on October 24, 2024 and sell it today you would earn a total of  4,553  from holding Svenska Handelsbanken AB or generate 38.82% return on investment over 90 days.

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

Svenska Handelsbanken AB  vs.  OptiCept Technologies AB

Svenska Handelsbanken

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Svenska Handelsbanken unveiled solid returns over the last few months and may actually be approaching a breakup point.

OptiCept Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Svenska Handelsbanken and OptiCept Technologies

The main advantage of trading using opposite Svenska Handelsbanken and OptiCept Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, OptiCept Technologies 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 OptiCept Technologies will offset losses from the drop in OptiCept Technologies' long position.

The idea behind Svenska Handelsbanken AB and OptiCept Technologies 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.