Correlation Between Swedbank and PolyPlank Publ

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

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

Diversification Opportunities for Swedbank and PolyPlank Publ

-0.53

Correlation Coefficient

Swedbank  PolyPlank Publ

Excellent diversification

The 3 months correlation between Swedbank and PolyPlank is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and PolyPlank publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPlank publ AB and Swedbank 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 Swedbank AB are associated (or correlated) with PolyPlank Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPlank publ AB has no effect on the direction of Swedbank i.e., Swedbank and PolyPlank Publ go up and down completely randomly.

Pair Corralation between Swedbank and PolyPlank Publ

Assuming the 90 days trading horizon Swedbank is expected to generate 1.34 times less return on investment than PolyPlank Publ. But when comparing it to its historical volatility, Swedbank AB is 6.59 times less risky than PolyPlank Publ. It trades about 0.19 of its potential returns per unit of risk. PolyPlank publ AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.30  in PolyPlank publ AB on December 30, 2024 and sell it today you would earn a total of  0.00  from holding PolyPlank publ AB or generate 0.0% return on investment over 90 days.

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

Swedbank AB  vs.  PolyPlank publ AB

Swedbank AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Swedbank sustained solid returns over the last few months and may actually be approaching a breakup point.

PolyPlank publ AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PolyPlank publ AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PolyPlank Publ unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swedbank and PolyPlank Publ

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

The idea behind Swedbank AB and PolyPlank publ 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.