Correlation Between Postal Savings and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Postal Savings 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 Postal Savings and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Postal Savings 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 Postal Savings with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Skandinaviska Enskilda.
Diversification Opportunities for Postal Savings and Skandinaviska Enskilda
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Postal and Skandinaviska is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Postal Savings and Skandinaviska Enskilda
Assuming the 90 days horizon Postal Savings Bank is expected to generate 1.24 times more return on investment than Skandinaviska Enskilda. However, Postal Savings is 1.24 times more volatile than Skandinaviska Enskilda Banken. It trades about -0.03 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about -0.14 per unit of risk. If you would invest 55.00 in Postal Savings Bank on August 25, 2024 and sell it today you would lose (1.00) from holding Postal Savings Bank or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Postal Savings Bank |
| Skandinaviska Enskilda |
Postal Savings and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Skandinaviska Enskilda
The main advantage of trading using opposite Postal Savings and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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.| Postal Savings vs. GFL ENVIRONM | Postal Savings vs. Perma Fix Environmental Services | Postal Savings vs. ANTA SPORTS PRODUCT | Postal Savings vs. SCIENCE IN SPORT |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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