Correlation Between Volati AB and SBB-D

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

By analyzing existing cross correlation between Volati AB and Samhaellsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Volati AB and SBB-D 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 Volati AB with a short position of SBB-D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volati AB and SBB-D.

Diversification Opportunities for Volati AB and SBB-D

-0.26

Correlation Coefficient

Volati AB  SBB-D

Very good diversification

The 3 months correlation between Volati and SBB-D is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Volati AB and Samhaellsbyggnadsbolaget i Nor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhaellsbyggnadsbol and Volati 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 Volati AB are associated (or correlated) with SBB-D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhaellsbyggnadsbol has no effect on the direction of Volati AB i.e., Volati AB and SBB-D go up and down completely randomly.

Pair Corralation between Volati AB and SBB-D

Assuming the 90 days trading horizon Volati AB is expected to generate 0.71 times more return on investment than SBB-D. However, Volati AB is 1.41 times less risky than SBB-D. It trades about 0.08 of its potential returns per unit of risk. Samhaellsbyggnadsbolaget i Norden is currently generating about -0.06 per unit of risk. If you would invest  9,810  in Volati AB on December 30, 2024 and sell it today you would earn a total of  1,130  from holding Volati AB or generate 11.52% return on investment over 90 days.

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

Volati AB  vs.  Samhaellsbyggnadsbolaget i Nor

Volati AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Volati AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Volati AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Samhaellsbyggnadsbol

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Volati AB and SBB-D

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

The idea behind Volati AB and Samhaellsbyggnadsbolaget i Norden 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.