Correlation Between Telefonaktiebolaget and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget 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 Telefonaktiebolaget and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Telefonaktiebolaget 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 Telefonaktiebolaget with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Skandinaviska Enskilda.
Diversification Opportunities for Telefonaktiebolaget and Skandinaviska Enskilda
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telefonaktiebolaget and Skandinaviska is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson 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 Telefonaktiebolaget i.e., Telefonaktiebolaget and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Skandinaviska Enskilda
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 1.27 times more return on investment than Skandinaviska Enskilda. However, Telefonaktiebolaget is 1.27 times more volatile than Skandinaviska Enskilda Banken. It trades about 0.43 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.52 per unit of risk. If you would invest 6,774 in Telefonaktiebolaget LM Ericsson on February 8, 2025 and sell it today you would earn a total of 1,326 from holding Telefonaktiebolaget LM Ericsson or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Telefonaktiebolaget |
| Skandinaviska Enskilda |
Telefonaktiebolaget and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and Skandinaviska Enskilda
The main advantage of trading using opposite Telefonaktiebolaget and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget 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.| Telefonaktiebolaget vs. Clinical Laserthermia Systems | Telefonaktiebolaget vs. Net Insight AB | Telefonaktiebolaget vs. Karolinska Development AB | Telefonaktiebolaget vs. Mekonomen 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |