Correlation Between Saxlund Group and Scandinavian Enviro
Can any of the company-specific risk be diversified away by investing in both Saxlund Group and Scandinavian Enviro 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 Saxlund Group and Scandinavian Enviro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saxlund Group AB and Scandinavian Enviro Systems, you can compare the effects of market volatilities on Saxlund Group and Scandinavian Enviro 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 Saxlund Group with a short position of Scandinavian Enviro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saxlund Group and Scandinavian Enviro.
Diversification Opportunities for Saxlund Group and Scandinavian Enviro
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saxlund and Scandinavian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Saxlund Group AB and Scandinavian Enviro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Enviro and Saxlund Group 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 Saxlund Group AB are associated (or correlated) with Scandinavian Enviro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Enviro has no effect on the direction of Saxlund Group i.e., Saxlund Group and Scandinavian Enviro go up and down completely randomly.
Pair Corralation between Saxlund Group and Scandinavian Enviro
Assuming the 90 days trading horizon Saxlund Group AB is expected to generate 3.56 times more return on investment than Scandinavian Enviro. However, Saxlund Group is 3.56 times more volatile than Scandinavian Enviro Systems. It trades about 0.12 of its potential returns per unit of risk. Scandinavian Enviro Systems is currently generating about -0.08 per unit of risk. If you would invest 860.00 in Saxlund Group AB on August 28, 2024 and sell it today you would earn a total of 130.00 from holding Saxlund Group AB or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saxlund Group AB vs. Scandinavian Enviro Systems
Performance |
| Timeline |
| Saxlund Group AB |
| Scandinavian Enviro |
Saxlund Group and Scandinavian Enviro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saxlund Group and Scandinavian Enviro
The main advantage of trading using opposite Saxlund Group and Scandinavian Enviro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saxlund Group position performs unexpectedly, Scandinavian Enviro 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 Scandinavian Enviro will offset losses from the drop in Scandinavian Enviro's long position.| Saxlund Group vs. Minesto AB | Saxlund Group vs. Sivers IMA Holding | Saxlund Group vs. SolTech Energy Sweden | Saxlund Group vs. AAC Clyde Space |
| Scandinavian Enviro vs. Minesto AB | Scandinavian Enviro vs. Sivers IMA Holding | Scandinavian Enviro vs. SolTech Energy Sweden | Scandinavian Enviro vs. AAC Clyde Space |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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