Correlation Between Skandinaviska Enskilda and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on Skandinaviska Enskilda and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Catalyst Media.
Diversification Opportunities for Skandinaviska Enskilda and Catalyst Media
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and Catalyst is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Catalyst Media go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Catalyst Media
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.75 times more return on investment than Catalyst Media. However, Skandinaviska Enskilda Banken is 1.34 times less risky than Catalyst Media. It trades about 0.05 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.03 per unit of risk. If you would invest 12,659 in Skandinaviska Enskilda Banken on September 12, 2024 and sell it today you would earn a total of 2,981 from holding Skandinaviska Enskilda Banken or generate 23.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Catalyst Media Group
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Catalyst Media Group |
Skandinaviska Enskilda and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Catalyst Media
The main advantage of trading using opposite Skandinaviska Enskilda and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Skandinaviska Enskilda vs. Hong Kong Land | Skandinaviska Enskilda vs. Neometals | Skandinaviska Enskilda vs. Coor Service Management | Skandinaviska Enskilda vs. Fidelity Sustainable USD |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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