Correlation Between Rottneros and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Rottneros 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 Rottneros and SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rottneros AB and SSAB AB, you can compare the effects of market volatilities on Rottneros 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 Rottneros with a short position of SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rottneros and SSAB AB.
Diversification Opportunities for Rottneros and SSAB AB
Very good diversification
The 3 months correlation between Rottneros and SSAB is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rottneros AB and SSAB AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB and Rottneros 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 Rottneros AB 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 has no effect on the direction of Rottneros i.e., Rottneros and SSAB AB go up and down completely randomly.
Pair Corralation between Rottneros and SSAB AB
Assuming the 90 days trading horizon Rottneros AB is expected to under-perform the SSAB AB. But the stock apears to be less risky and, when comparing its historical volatility, Rottneros AB is 1.33 times less risky than SSAB AB. The stock trades about -0.09 of its potential returns per unit of risk. The SSAB AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,530 in SSAB AB on September 14, 2024 and sell it today you would earn a total of 360.00 from holding SSAB AB or generate 7.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Rottneros AB vs. SSAB AB
Performance |
Timeline |
Rottneros AB |
SSAB AB |
Rottneros and SSAB AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rottneros and SSAB AB
The main advantage of trading using opposite Rottneros and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rottneros 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.Rottneros vs. SSAB AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Axfood AB | Rottneros vs. Proact IT Group |
SSAB AB vs. Boliden AB | SSAB AB vs. SSAB AB | SSAB AB vs. Tele2 AB | SSAB AB vs. Samhllsbyggnadsbolaget i Norden |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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