Correlation Between Swedbank and Serstech

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

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

Diversification Opportunities for Swedbank and Serstech

-0.48

Correlation Coefficient

Swedbank  Serstech

Very good diversification

The 3 months correlation between Swedbank and Serstech is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Serstech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serstech AB and Swedbank 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 Swedbank AB are associated (or correlated) with Serstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serstech AB has no effect on the direction of Swedbank i.e., Swedbank and Serstech go up and down completely randomly.

Pair Corralation between Swedbank and Serstech

Assuming the 90 days trading horizon Swedbank AB is expected to generate 0.39 times more return on investment than Serstech. However, Swedbank AB is 2.59 times less risky than Serstech. It trades about 0.19 of its potential returns per unit of risk. Serstech AB is currently generating about -0.15 per unit of risk. If you would invest  22,520  in Swedbank AB on April 25, 2025 and sell it today you would earn a total of  3,080  from holding Swedbank AB or generate 13.68% return on investment over 90 days.

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

Swedbank AB  vs.  Serstech AB

Swedbank AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 14 (%) 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.

Serstech AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Serstech AB 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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Swedbank and Serstech

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

The idea behind Swedbank AB and Serstech 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 Stocks Directory module to find actively traded stocks across global markets.