Correlation Between Investment and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Investment 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 Investment and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment AB Oresund and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Investment 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 Investment with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Skandinaviska Enskilda.
Diversification Opportunities for Investment and Skandinaviska Enskilda
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investment and Skandinaviska is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Investment 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 Investment AB Oresund 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 Investment i.e., Investment and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Investment and Skandinaviska Enskilda
Assuming the 90 days trading horizon Investment AB Oresund is expected to under-perform the Skandinaviska Enskilda. But the stock apears to be less risky and, when comparing its historical volatility, Investment AB Oresund is 1.0 times less risky than Skandinaviska Enskilda. The stock trades about -0.02 of its potential returns per unit of risk. The Skandinaviska Enskilda Banken is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 15,280 in Skandinaviska Enskilda Banken on August 31, 2024 and sell it today you would earn a total of 60.00 from holding Skandinaviska Enskilda Banken or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment AB Oresund vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Investment AB Oresund |
| Skandinaviska Enskilda |
Investment and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Skandinaviska Enskilda
The main advantage of trading using opposite Investment and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment 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.| Investment vs. Bure Equity AB | Investment vs. Creades AB | Investment vs. L E Lundbergfretagen | Investment vs. Industrivarden AB ser |
| Skandinaviska Enskilda vs. Svenska Handelsbanken AB | Skandinaviska Enskilda vs. Telia Company AB | Skandinaviska Enskilda vs. Tele2 AB | Skandinaviska Enskilda vs. H M Hennes |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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