Correlation Between Avanza Bank and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Avanza Bank 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 Avanza Bank and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanza Bank Holding and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Avanza Bank 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 Avanza Bank with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanza Bank and Skandinaviska Enskilda.
Diversification Opportunities for Avanza Bank and Skandinaviska Enskilda
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avanza and Skandinaviska is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Avanza Bank Holding and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Avanza Bank 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 Avanza Bank Holding 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 Avanza Bank i.e., Avanza Bank and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Avanza Bank and Skandinaviska Enskilda
Assuming the 90 days trading horizon Avanza Bank Holding is expected to generate 0.68 times more return on investment than Skandinaviska Enskilda. However, Avanza Bank Holding is 1.47 times less risky than Skandinaviska Enskilda. It trades about -0.15 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about -0.11 per unit of risk. If you would invest 22,610 in Avanza Bank Holding on August 24, 2024 and sell it today you would lose (880.00) from holding Avanza Bank Holding or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanza Bank Holding vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Avanza Bank Holding |
| Skandinaviska Enskilda |
Avanza Bank and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanza Bank and Skandinaviska Enskilda
The main advantage of trading using opposite Avanza Bank and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanza Bank 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.| Avanza Bank vs. Nordea Bank Abp | Avanza Bank vs. Skandinaviska Enskilda Banken | Avanza Bank vs. Skandinaviska Enskilda Banken | Avanza Bank vs. Swedbank AB |
| Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. Svenska Handelsbanken AB | Skandinaviska Enskilda vs. H M Hennes | Skandinaviska Enskilda vs. Telefonaktiebolaget LM Ericsson |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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