Correlation Between ANZ Group and Svenska Handelsbanken

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

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

Diversification Opportunities for ANZ Group and Svenska Handelsbanken

-0.03

Correlation Coefficient

ANZ Group  Svenska Handelsbanken

Good diversification

The 3 months correlation between ANZ and Svenska is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Svenska Handelsbanken PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and ANZ 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 ANZ Group Holdings are associated (or correlated) with Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of ANZ Group i.e., ANZ Group and Svenska Handelsbanken go up and down completely randomly.

Pair Corralation between ANZ Group and Svenska Handelsbanken

Assuming the 90 days horizon ANZ Group Holdings is expected to under-perform the Svenska Handelsbanken. But the otc stock apears to be less risky and, when comparing its historical volatility, ANZ Group Holdings is 1.5 times less risky than Svenska Handelsbanken. The otc stock trades about -0.16 of its potential returns per unit of risk. The Svenska Handelsbanken PK is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  479.00  in Svenska Handelsbanken PK on September 13, 2024 and sell it today you would earn a total of  32.00  from holding Svenska Handelsbanken PK or generate 6.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

ANZ Group Holdings  vs.  Svenska Handelsbanken PK

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Svenska Handelsbanken

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken PK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Svenska Handelsbanken is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANZ Group and Svenska Handelsbanken

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

The idea behind ANZ Group Holdings and Svenska Handelsbanken PK 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.