Correlation Between TradeDoubler and Swedbank

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

By analyzing existing cross correlation between TradeDoubler AB and Swedbank AB, you can compare the effects of market volatilities on TradeDoubler and Swedbank 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 TradeDoubler with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TradeDoubler and Swedbank.

Diversification Opportunities for TradeDoubler and Swedbank

0.2

Correlation Coefficient

TradeDoubler  Swedbank

Modest diversification

The 3 months correlation between TradeDoubler and Swedbank is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding TradeDoubler AB and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and TradeDoubler 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 TradeDoubler AB are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of TradeDoubler i.e., TradeDoubler and Swedbank go up and down completely randomly.

Pair Corralation between TradeDoubler and Swedbank

Assuming the 90 days trading horizon TradeDoubler AB is expected to under-perform the Swedbank. In addition to that, TradeDoubler is 1.65 times more volatile than Swedbank AB. It trades about -0.02 of its total potential returns per unit of risk. Swedbank AB is currently generating about -0.03 per unit of volatility. If you would invest  22,080  in Swedbank AB on September 2, 2024 and sell it today you would lose (700.00) from holding Swedbank AB or give up 3.17% of portfolio value over 90 days.

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

TradeDoubler AB  vs.  Swedbank AB

TradeDoubler AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TradeDoubler AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TradeDoubler is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Swedbank AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swedbank AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Swedbank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TradeDoubler and Swedbank

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

The idea behind TradeDoubler AB and Swedbank 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.