Correlation Between Skandinaviska Enskilda and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining Corp, you can compare the effects of market volatilities on Skandinaviska Enskilda and Endeavour Mining 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Endeavour Mining.
Diversification Opportunities for Skandinaviska Enskilda and Endeavour Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skandinaviska and Endeavour is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Endeavour Mining go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Endeavour Mining
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.43 times more return on investment than Endeavour Mining. However, Skandinaviska Enskilda Banken is 2.3 times less risky than Endeavour Mining. It trades about -0.05 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.29 per unit of risk. If you would invest 15,420 in Skandinaviska Enskilda Banken on August 26, 2024 and sell it today you would lose (180.00) from holding Skandinaviska Enskilda Banken or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Endeavour Mining Corp
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Endeavour Mining Corp |
Skandinaviska Enskilda and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Endeavour Mining
The main advantage of trading using opposite Skandinaviska Enskilda and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.| Skandinaviska Enskilda vs. Samsung Electronics Co | Skandinaviska Enskilda vs. Samsung Electronics Co | Skandinaviska Enskilda vs. Hyundai Motor | Skandinaviska Enskilda vs. Toyota Motor Corp |
| Endeavour Mining vs. Panther Metals PLC | Endeavour Mining vs. Neometals | Endeavour Mining vs. Metals Exploration Plc | Endeavour Mining vs. One Media iP |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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