Correlation Between Soder Sportfiske and Lea Bank

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

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

Diversification Opportunities for Soder Sportfiske and Lea Bank

-0.5

Correlation Coefficient

Soder Sportfiske  Lea Bank

Very good diversification

The 3 months correlation between Soder and Lea is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Soder Sportfiske AB and Lea Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lea Bank AB and Soder Sportfiske 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 Soder Sportfiske AB are associated (or correlated) with Lea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lea Bank AB has no effect on the direction of Soder Sportfiske i.e., Soder Sportfiske and Lea Bank go up and down completely randomly.

Pair Corralation between Soder Sportfiske and Lea Bank

Assuming the 90 days trading horizon Soder Sportfiske AB is expected to generate 1.1 times more return on investment than Lea Bank. However, Soder Sportfiske is 1.1 times more volatile than Lea Bank AB. It trades about 0.13 of its potential returns per unit of risk. Lea Bank AB is currently generating about 0.01 per unit of risk. If you would invest  2,520  in Soder Sportfiske AB on April 21, 2025 and sell it today you would earn a total of  580.00  from holding Soder Sportfiske AB or generate 23.02% return on investment over 90 days.

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

Soder Sportfiske AB  vs.  Lea Bank AB

Soder Sportfiske

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Soder Sportfiske AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Soder Sportfiske unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lea Bank AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Soder Sportfiske and Lea Bank

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

The idea behind Soder Sportfiske AB and Lea Bank 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.