Correlation Between Simris Alg and SBB-B

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

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

Diversification Opportunities for Simris Alg and SBB-B

0.81

Correlation Coefficient

Simris Alg  SBB-B

Very poor diversification

The 3 months correlation between Simris and SBB-B is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Simris Alg AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget and Simris Alg 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 Simris Alg AB are associated (or correlated) with SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Simris Alg i.e., Simris Alg and SBB-B go up and down completely randomly.

Pair Corralation between Simris Alg and SBB-B

Assuming the 90 days trading horizon Simris Alg AB is expected to generate 2.52 times more return on investment than SBB-B. However, Simris Alg is 2.52 times more volatile than Samhllsbyggnadsbolaget i Norden. It trades about -0.05 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.2 per unit of risk. If you would invest  9.20  in Simris Alg AB on September 13, 2024 and sell it today you would lose (1.58) from holding Simris Alg AB or give up 17.17% of portfolio value over 90 days.

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

Simris Alg AB  vs.  Samhllsbyggnadsbolaget i Norde

Simris Alg AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simris Alg AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Simris Alg and SBB-B

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

The idea behind Simris Alg AB and Samhllsbyggnadsbolaget i Norden 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.