Correlation Between Tele2 AB and SBB-B

Can any of the company-specific risk be diversified away by investing in both Tele2 AB and SBB-B 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 Tele2 AB and SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tele2 AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Tele2 AB and SBB-B 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 Tele2 AB with a short position of SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and SBB-B.

Diversification Opportunities for Tele2 AB and SBB-B

0.5

Correlation Coefficient

Tele2 AB  SBB-B

Very weak diversification

The 3 months correlation between Tele2 and SBB-B is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget and Tele2 AB 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 Tele2 AB are associated (or correlated) with SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Tele2 AB i.e., Tele2 AB and SBB-B go up and down completely randomly.

Pair Corralation between Tele2 AB and SBB-B

Assuming the 90 days trading horizon Tele2 AB is expected to generate 3.41 times less return on investment than SBB-B. But when comparing it to its historical volatility, Tele2 AB is 4.25 times less risky than SBB-B. It trades about 0.14 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  391.00  in Samhllsbyggnadsbolaget i Norden on April 25, 2025 and sell it today you would earn a total of  139.00  from holding Samhllsbyggnadsbolaget i Norden or generate 35.55% return on investment over 90 days.

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

Tele2 AB  vs.  Samhllsbyggnadsbolaget i Norde

Tele2 AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tele2 AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Tele2 AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Samhllsbyggnadsbolaget

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samhllsbyggnadsbolaget i Norden are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBB-B unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tele2 AB and SBB-B

The main advantage of trading using opposite Tele2 AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B's long position.

The idea behind Tele2 AB and Samhllsbyggnadsbolaget i Norden 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.