Correlation Between LIFE + and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both LIFE + 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 LIFE + and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE BANC SPLIT and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on LIFE + 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 LIFE + with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE + and Skandinaviska Enskilda.
Diversification Opportunities for LIFE + and Skandinaviska Enskilda
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LIFE and Skandinaviska is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and LIFE + 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 LIFE BANC SPLIT 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 LIFE + i.e., LIFE + and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between LIFE + and Skandinaviska Enskilda
Assuming the 90 days horizon LIFE + is expected to generate 1.14 times less return on investment than Skandinaviska Enskilda. In addition to that, LIFE + is 1.56 times more volatile than Skandinaviska Enskilda Banken. It trades about 0.04 of its total potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.08 per unit of volatility. If you would invest 793.00 in Skandinaviska Enskilda Banken on August 31, 2024 and sell it today you would earn a total of 508.00 from holding Skandinaviska Enskilda Banken or generate 64.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFE BANC SPLIT vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| LIFE BANC SPLIT |
| Skandinaviska Enskilda |
LIFE + and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFE + and Skandinaviska Enskilda
The main advantage of trading using opposite LIFE + and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE + 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.| LIFE + vs. SEKISUI CHEMICAL | LIFE + vs. Chongqing Machinery Electric | LIFE + vs. TIANDE CHEMICAL | LIFE + vs. AGRICULTBK HADR25 YC |
| Skandinaviska Enskilda vs. REGAL ASIAN INVESTMENTS | Skandinaviska Enskilda vs. MGIC INVESTMENT | Skandinaviska Enskilda vs. Geely Automobile Holdings | Skandinaviska Enskilda vs. REINET INVESTMENTS SCA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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