Correlation Between SaveLend Group and Swedbank

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

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

Diversification Opportunities for SaveLend Group and Swedbank

-0.9

Correlation Coefficient

SaveLend Group  Swedbank

Pay attention - limited upside

The 3 months correlation between SaveLend and Swedbank is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding SaveLend Group AB and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and SaveLend Group 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 SaveLend Group AB are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of SaveLend Group i.e., SaveLend Group and Swedbank go up and down completely randomly.

Pair Corralation between SaveLend Group and Swedbank

Assuming the 90 days trading horizon SaveLend Group AB is expected to under-perform the Swedbank. In addition to that, SaveLend Group is 2.84 times more volatile than Swedbank AB. It trades about -0.22 of its total potential returns per unit of risk. Swedbank AB is currently generating about 0.28 per unit of volatility. If you would invest  21,650  in Swedbank AB on December 1, 2024 and sell it today you would earn a total of  4,180  from holding Swedbank AB or generate 19.31% return on investment over 90 days.

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

SaveLend Group AB  vs.  Swedbank AB

SaveLend Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days SaveLend Group AB 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.

Swedbank AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 22 (%) 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.

Pair Trading with SaveLend Group and Swedbank

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

The idea behind SaveLend Group AB and Swedbank 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.