Correlation Between SBB-B and Storskogen Group

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

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

Diversification Opportunities for SBB-B and Storskogen Group

-0.15

Correlation Coefficient

SBB-B  Storskogen Group

Good diversification

The 3 months correlation between SBB-B and Storskogen is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Storskogen Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storskogen Group and SBB-B 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 Samhllsbyggnadsbolaget i Norden are associated (or correlated) with Storskogen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storskogen Group has no effect on the direction of SBB-B i.e., SBB-B and Storskogen Group go up and down completely randomly.

Pair Corralation between SBB-B and Storskogen Group

Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to under-perform the Storskogen Group. In addition to that, SBB-B is 1.33 times more volatile than Storskogen Group AB. It trades about -0.17 of its total potential returns per unit of risk. Storskogen Group AB is currently generating about 0.07 per unit of volatility. If you would invest  1,003  in Storskogen Group AB on September 4, 2024 and sell it today you would earn a total of  111.00  from holding Storskogen Group AB or generate 11.07% return on investment over 90 days.

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

Samhllsbyggnadsbolaget i Norde  vs.  Storskogen Group AB

Samhllsbyggnadsbolaget

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samhllsbyggnadsbolaget 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Storskogen Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Storskogen Group AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Storskogen Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SBB-B and Storskogen Group

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

The idea behind Samhllsbyggnadsbolaget i Norden and Storskogen Group 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.