Correlation Between SinterCast and Swedbank

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

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

Diversification Opportunities for SinterCast and Swedbank

0.71

Correlation Coefficient

SinterCast  Swedbank

Poor diversification

The 3 months correlation between SinterCast and Swedbank is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and SinterCast 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 SinterCast 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 SinterCast i.e., SinterCast and Swedbank go up and down completely randomly.

Pair Corralation between SinterCast and Swedbank

Assuming the 90 days trading horizon SinterCast AB is expected to generate 1.18 times more return on investment than Swedbank. However, SinterCast is 1.18 times more volatile than Swedbank AB. It trades about 0.17 of its potential returns per unit of risk. Swedbank AB is currently generating about 0.17 per unit of risk. If you would invest  10,037  in SinterCast AB on April 20, 2025 and sell it today you would earn a total of  1,463  from holding SinterCast AB or generate 14.58% return on investment over 90 days.

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

SinterCast AB  vs.  Swedbank AB

SinterCast AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SinterCast AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SinterCast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Swedbank AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Swedbank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SinterCast and Swedbank

The main advantage of trading using opposite SinterCast and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SinterCast 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 SinterCast 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.