Correlation Between SSAB AB and Viking Line

Can any of the company-specific risk be diversified away by investing in both SSAB AB and Viking Line 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 SSAB AB and Viking Line into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SSAB AB ser and Viking Line Abp, you can compare the effects of market volatilities on SSAB AB and Viking Line 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 SSAB AB with a short position of Viking Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and Viking Line.

Diversification Opportunities for SSAB AB and Viking Line

-0.12

Correlation Coefficient

SSAB AB  Viking Line

Good diversification

The 3 months correlation between SSAB and Viking is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB ser and Viking Line Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Line Abp and SSAB AB 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 SSAB AB ser are associated (or correlated) with Viking Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Line Abp has no effect on the direction of SSAB AB i.e., SSAB AB and Viking Line go up and down completely randomly.

Pair Corralation between SSAB AB and Viking Line

Assuming the 90 days trading horizon SSAB AB ser is expected to under-perform the Viking Line. In addition to that, SSAB AB is 1.24 times more volatile than Viking Line Abp. It trades about -0.09 of its total potential returns per unit of risk. Viking Line Abp is currently generating about 0.01 per unit of volatility. If you would invest  2,050  in Viking Line Abp on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Viking Line Abp or generate 0.0% return on investment over 90 days.

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

SSAB AB ser  vs.  Viking Line Abp

SSAB AB ser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSAB AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Viking Line Abp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viking Line Abp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Viking Line is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SSAB AB and Viking Line

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

The idea behind SSAB AB ser and Viking Line Abp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.