Correlation Between Elanders and Studsvik
Can any of the company-specific risk be diversified away by investing in both Elanders and Studsvik 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 Elanders and Studsvik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elanders AB and Studsvik AB, you can compare the effects of market volatilities on Elanders and Studsvik 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 Elanders with a short position of Studsvik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elanders and Studsvik.
Diversification Opportunities for Elanders and Studsvik
Poor diversification
The 3 months correlation between Elanders and Studsvik is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Elanders AB and Studsvik AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Studsvik AB and Elanders 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 Elanders AB are associated (or correlated) with Studsvik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Studsvik AB has no effect on the direction of Elanders i.e., Elanders and Studsvik go up and down completely randomly.
Pair Corralation between Elanders and Studsvik
Assuming the 90 days trading horizon Elanders AB is expected to under-perform the Studsvik. But the stock apears to be less risky and, when comparing its historical volatility, Elanders AB is 1.82 times less risky than Studsvik. The stock trades about -0.02 of its potential returns per unit of risk. The Studsvik AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 21,500 in Studsvik AB on September 6, 2025 and sell it today you would earn a total of 7,500 from holding Studsvik AB or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elanders AB vs. Studsvik AB
Performance |
| Timeline |
| Elanders AB |
| Studsvik AB |
Elanders and Studsvik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elanders and Studsvik
The main advantage of trading using opposite Elanders and Studsvik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elanders position performs unexpectedly, Studsvik 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 Studsvik will offset losses from the drop in Studsvik's long position.| Elanders vs. Nordic Asia Investment | Elanders vs. Havsfrun Investment AB | Elanders vs. I Tech | Elanders vs. Lundin Mining |
| Studsvik vs. Invisio Communications AB | Studsvik vs. Kinnevik Investment AB | Studsvik vs. Serstech AB | Studsvik vs. SaltX Technology Holding |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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