Correlation Between Enad Global and Svenska Handelsbanken
Can any of the company-specific risk be diversified away by investing in both Enad Global and Svenska Handelsbanken 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 Enad Global and Svenska Handelsbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enad Global 7 and Svenska Handelsbanken AB, you can compare the effects of market volatilities on Enad Global and Svenska Handelsbanken 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 Enad Global with a short position of Svenska Handelsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enad Global and Svenska Handelsbanken.
Diversification Opportunities for Enad Global and Svenska Handelsbanken
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enad and Svenska is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Enad Global 7 and Svenska Handelsbanken AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Handelsbanken and Enad Global 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 Enad Global 7 are associated (or correlated) with Svenska Handelsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Handelsbanken has no effect on the direction of Enad Global i.e., Enad Global and Svenska Handelsbanken go up and down completely randomly.
Pair Corralation between Enad Global and Svenska Handelsbanken
Assuming the 90 days trading horizon Enad Global 7 is expected to generate 2.84 times more return on investment than Svenska Handelsbanken. However, Enad Global is 2.84 times more volatile than Svenska Handelsbanken AB. It trades about 0.27 of its potential returns per unit of risk. Svenska Handelsbanken AB is currently generating about 0.05 per unit of risk. If you would invest 1,398 in Enad Global 7 on September 24, 2024 and sell it today you would earn a total of 224.00 from holding Enad Global 7 or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enad Global 7 vs. Svenska Handelsbanken AB
Performance |
| Timeline |
| Enad Global 7 |
| Svenska Handelsbanken |
Enad Global and Svenska Handelsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enad Global and Svenska Handelsbanken
The main advantage of trading using opposite Enad Global and Svenska Handelsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enad Global position performs unexpectedly, Svenska Handelsbanken 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 Svenska Handelsbanken will offset losses from the drop in Svenska Handelsbanken's long position.| Enad Global vs. Samhllsbyggnadsbolaget i Norden | Enad Global vs. Sinch AB | Enad Global vs. Zaptec AS | Enad Global vs. Evolution AB |
| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB | Svenska Handelsbanken vs. Investor AB ser |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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