Correlation Between Central Asia and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Skandinaviska Enskilda.
Diversification Opportunities for Central Asia and Skandinaviska Enskilda
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Central and Skandinaviska is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Central Asia and Skandinaviska Enskilda
Assuming the 90 days trading horizon Central Asia is expected to generate 1.42 times less return on investment than Skandinaviska Enskilda. In addition to that, Central Asia is 2.09 times more volatile than Skandinaviska Enskilda Banken. It trades about 0.14 of its total potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.42 per unit of volatility. If you would invest 15,160 in Skandinaviska Enskilda Banken on October 20, 2024 and sell it today you would earn a total of 1,120 from holding Skandinaviska Enskilda Banken or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Central Asia Metals |
| Skandinaviska Enskilda |
Central Asia and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Skandinaviska Enskilda
The main advantage of trading using opposite Central Asia and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. InterContinental Hotels Group | Central Asia vs. Rosslyn Data Technologies | Central Asia vs. Commerzbank AG | Central Asia vs. St Galler Kantonalbank |
| Skandinaviska Enskilda vs. Walmart | Skandinaviska Enskilda vs. BYD Co | Skandinaviska Enskilda vs. Volkswagen AG | Skandinaviska Enskilda vs. Volkswagen AG Non Vtg |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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