Correlation Between Skandinaviska Enskilda and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Metals Exploration 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 Metals Exploration 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 Metals Exploration Plc, you can compare the effects of market volatilities on Skandinaviska Enskilda and Metals Exploration 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 Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Metals Exploration.
Diversification Opportunities for Skandinaviska Enskilda and Metals Exploration
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and Metals is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration Plc 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 Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Metals Exploration go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Metals Exploration
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 6.63 times less return on investment than Metals Exploration. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 2.52 times less risky than Metals Exploration. It trades about 0.03 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Metals Exploration Plc on August 30, 2024 and sell it today you would earn a total of 395.00 from holding Metals Exploration Plc or generate 207.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Metals Exploration Plc
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Metals Exploration Plc |
Skandinaviska Enskilda and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Metals Exploration
The main advantage of trading using opposite Skandinaviska Enskilda and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| Skandinaviska Enskilda vs. Lendinvest PLC | Skandinaviska Enskilda vs. Neometals | Skandinaviska Enskilda vs. Albion Technology General | Skandinaviska Enskilda vs. Jupiter Fund Management |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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