Correlation Between Viking Line and SSAB AB

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

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

Diversification Opportunities for Viking Line and SSAB AB

-0.12

Correlation Coefficient

Viking Line  SSAB AB

Good diversification

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

Pair Corralation between Viking Line and SSAB AB

Assuming the 90 days trading horizon Viking Line Abp is expected to generate 0.96 times more return on investment than SSAB AB. However, Viking Line Abp is 1.05 times less risky than SSAB AB. It trades about -0.01 of its potential returns per unit of risk. SSAB AB ser is currently generating about -0.63 per unit of risk. If you would invest  2,060  in Viking Line Abp on October 12, 2024 and sell it today you would lose (10.00) from holding Viking Line Abp or give up 0.49% of portfolio value over 90 days.

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

Viking Line Abp  vs.  SSAB AB ser

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.

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.

Pair Trading with Viking Line and SSAB AB

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

The idea behind Viking Line Abp and SSAB AB ser 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.