Correlation Between Skandinaviska Enskilda and 24SevenOffice Scandinavia
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and 24SevenOffice Scandinavia 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 Skandinaviska Enskilda and 24SevenOffice Scandinavia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skandinaviska Enskilda Banken and 24SevenOffice Scandinavia AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and 24SevenOffice Scandinavia 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 Skandinaviska Enskilda with a short position of 24SevenOffice Scandinavia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and 24SevenOffice Scandinavia.
Diversification Opportunities for Skandinaviska Enskilda and 24SevenOffice Scandinavia
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skandinaviska and 24SevenOffice is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and 24SevenOffice Scandinavia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SevenOffice Scandinavia and Skandinaviska Enskilda 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 Skandinaviska Enskilda Banken are associated (or correlated) with 24SevenOffice Scandinavia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SevenOffice Scandinavia has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and 24SevenOffice Scandinavia go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and 24SevenOffice Scandinavia
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 65.96 times less return on investment than 24SevenOffice Scandinavia. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 1.32 times less risky than 24SevenOffice Scandinavia. It trades about 0.01 of its potential returns per unit of risk. 24SevenOffice Scandinavia AB is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,775 in 24SevenOffice Scandinavia AB on November 7, 2024 and sell it today you would earn a total of 235.00 from holding 24SevenOffice Scandinavia AB or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. 24SevenOffice Scandinavia AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| 24SevenOffice Scandinavia |
Skandinaviska Enskilda and 24SevenOffice Scandinavia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and 24SevenOffice Scandinavia
The main advantage of trading using opposite Skandinaviska Enskilda and 24SevenOffice Scandinavia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, 24SevenOffice Scandinavia 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 24SevenOffice Scandinavia will offset losses from the drop in 24SevenOffice Scandinavia's long position.| Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. Svenska Handelsbanken AB | Skandinaviska Enskilda vs. H M Hennes | Skandinaviska Enskilda vs. Telefonaktiebolaget LM Ericsson |
| 24SevenOffice Scandinavia vs. Humble Group AB | 24SevenOffice Scandinavia vs. Enad Global 7 | 24SevenOffice Scandinavia vs. Goodbye Kansas Group | 24SevenOffice Scandinavia vs. KABE Group AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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