Correlation Between Svenska Handelsbanken and BHG Group
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and BHG 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 Svenska Handelsbanken and BHG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and BHG Group AB, you can compare the effects of market volatilities on Svenska Handelsbanken and BHG 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 Svenska Handelsbanken with a short position of BHG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and BHG Group.
Diversification Opportunities for Svenska Handelsbanken and BHG Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Svenska and BHG is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and BHG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHG Group AB and Svenska Handelsbanken 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 Svenska Handelsbanken AB are associated (or correlated) with BHG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHG Group AB has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and BHG Group go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and BHG Group
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 3.75 times less return on investment than BHG Group. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 2.63 times less risky than BHG Group. It trades about 0.11 of its potential returns per unit of risk. BHG Group AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,845 in BHG Group AB on September 5, 2024 and sell it today you would earn a total of 167.00 from holding BHG Group AB or generate 9.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Svenska Handelsbanken AB vs. BHG Group AB
Performance |
Timeline |
Svenska Handelsbanken |
BHG Group AB |
Svenska Handelsbanken and BHG Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Svenska Handelsbanken and BHG Group
The main advantage of trading using opposite Svenska Handelsbanken and BHG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, BHG 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 BHG Group will offset losses from the drop in BHG Group's long position.Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Atlas Copco AB | Svenska Handelsbanken vs. Skandinaviska Enskilda Banken | Svenska Handelsbanken vs. Skanska AB |
BHG Group vs. Sinch AB | BHG Group vs. Byggmax Group AB | BHG Group vs. Stillfront Group AB | BHG Group vs. Boozt AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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