Correlation Between Skandinaviska Enskilda and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Flow Traders 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 Skandinaviska Enskilda and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skandinaviska Enskilda Banken and Flow Traders NV, you can compare the effects of market volatilities on Skandinaviska Enskilda and Flow Traders 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 Skandinaviska Enskilda with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Flow Traders.
Diversification Opportunities for Skandinaviska Enskilda and Flow Traders
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Skandinaviska and Flow is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV and Skandinaviska Enskilda 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 Skandinaviska Enskilda Banken are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Flow Traders go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Flow Traders
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to under-perform the Flow Traders. But the stock apears to be less risky and, when comparing its historical volatility, Skandinaviska Enskilda Banken is 1.23 times less risky than Flow Traders. The stock trades about -0.11 of its potential returns per unit of risk. The Flow Traders NV is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,724 in Flow Traders NV on August 31, 2024 and sell it today you would earn a total of 397.00 from holding Flow Traders NV or generate 23.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Flow Traders NV
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Flow Traders NV |
Skandinaviska Enskilda and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Flow Traders
The main advantage of trading using opposite Skandinaviska Enskilda and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Skandinaviska Enskilda vs. Games Workshop Group | Skandinaviska Enskilda vs. Endeavour Mining Corp | Skandinaviska Enskilda vs. Lundin Mining Corp | Skandinaviska Enskilda vs. Park Hotels Resorts |
| Flow Traders vs. Central Asia Metals | Flow Traders vs. Taiwan Semiconductor Manufacturing | Flow Traders vs. Sovereign Metals | Flow Traders vs. Jacquet Metal Service |
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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