Correlation Between Swedbank and Spago Nanomedical

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

By analyzing existing cross correlation between Swedbank AB and Spago Nanomedical AB, you can compare the effects of market volatilities on Swedbank and Spago Nanomedical 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 Spago Nanomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Spago Nanomedical.

Diversification Opportunities for Swedbank and Spago Nanomedical

-0.48

Correlation Coefficient

Swedbank  Spago Nanomedical

Very good diversification

The 3 months correlation between Swedbank and Spago is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Spago Nanomedical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spago Nanomedical 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 Spago Nanomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spago Nanomedical has no effect on the direction of Swedbank i.e., Swedbank and Spago Nanomedical go up and down completely randomly.

Pair Corralation between Swedbank and Spago Nanomedical

Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.26 times more return on investment than Spago Nanomedical. However, Swedbank AB is 3.92 times less risky than Spago Nanomedical. It trades about 0.14 of its potential returns per unit of risk. Spago Nanomedical AB is currently generating about -0.01 per unit of risk. If you would invest  20,700  in Swedbank AB on October 10, 2024 and sell it today you would earn a total of  2,050  from holding Swedbank AB or generate 9.9% 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.  Spago Nanomedical AB

Swedbank AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Swedbank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Spago Nanomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spago Nanomedical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Spago Nanomedical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Swedbank and Spago Nanomedical

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

The idea behind Swedbank AB and Spago Nanomedical 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.