Correlation Between St Galler and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both St Galler and Skandinaviska Enskilda 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 St Galler and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on St Galler and Skandinaviska Enskilda 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 St Galler with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Skandinaviska Enskilda.
Diversification Opportunities for St Galler and Skandinaviska Enskilda
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0QQZ and Skandinaviska is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and St Galler 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 St Galler Kantonalbank are associated (or correlated) with Skandinaviska Enskilda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skandinaviska Enskilda has no effect on the direction of St Galler i.e., St Galler and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between St Galler and Skandinaviska Enskilda
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to under-perform the Skandinaviska Enskilda. But the stock apears to be less risky and, when comparing its historical volatility, St Galler Kantonalbank is 2.25 times less risky than Skandinaviska Enskilda. The stock trades about -0.03 of its potential returns per unit of risk. The Skandinaviska Enskilda Banken is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,322 in Skandinaviska Enskilda Banken on September 3, 2024 and sell it today you would earn a total of 3,018 from holding Skandinaviska Enskilda Banken or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.29% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| St Galler Kantonalbank |
| Skandinaviska Enskilda |
St Galler and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Skandinaviska Enskilda
The main advantage of trading using opposite St Galler and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Skandinaviska Enskilda 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 Skandinaviska Enskilda will offset losses from the drop in Skandinaviska Enskilda's long position.| St Galler vs. Iron Mountain | St Galler vs. Team Internet Group | St Galler vs. CVS Health Corp | St Galler vs. MyHealthChecked Plc |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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