Correlation Between Svenska Handelsbanken and Precise Biometrics

Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Precise Biometrics 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 Precise Biometrics 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 Precise Biometrics AB, you can compare the effects of market volatilities on Svenska Handelsbanken and Precise Biometrics 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 Precise Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Precise Biometrics.

Diversification Opportunities for Svenska Handelsbanken and Precise Biometrics

-0.46

Correlation Coefficient

Svenska Handelsbanken  Precise Biometrics

Very good diversification

The 3 months correlation between Svenska and Precise is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Precise Biometrics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precise Biometrics 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 Precise Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precise Biometrics has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Precise Biometrics go up and down completely randomly.

Pair Corralation between Svenska Handelsbanken and Precise Biometrics

Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.59 times more return on investment than Precise Biometrics. However, Svenska Handelsbanken AB is 1.69 times less risky than Precise Biometrics. It trades about 0.09 of its potential returns per unit of risk. Precise Biometrics AB is currently generating about -0.15 per unit of risk. If you would invest  17,320  in Svenska Handelsbanken AB on April 25, 2025 and sell it today you would earn a total of  1,820  from holding Svenska Handelsbanken AB or generate 10.51% return on investment over 90 days.

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

Svenska Handelsbanken AB  vs.  Precise Biometrics AB

Svenska Handelsbanken

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Svenska Handelsbanken AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Svenska Handelsbanken may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Precise Biometrics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Precise Biometrics AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Svenska Handelsbanken and Precise Biometrics

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

The idea behind Svenska Handelsbanken AB and Precise Biometrics 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.