Correlation Between Skandinaviska Enskilda and Boliden AB
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Boliden AB 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 Boliden AB 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 Boliden AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Boliden AB 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 Boliden AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Boliden AB.
Diversification Opportunities for Skandinaviska Enskilda and Boliden AB
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and Boliden is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Boliden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boliden AB 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 Boliden AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boliden AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Boliden AB go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Boliden AB
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.54 times more return on investment than Boliden AB. However, Skandinaviska Enskilda Banken is 1.86 times less risky than Boliden AB. It trades about -0.05 of its potential returns per unit of risk. Boliden AB is currently generating about -0.05 per unit of risk. If you would invest 15,250 in Skandinaviska Enskilda Banken on August 28, 2024 and sell it today you would lose (195.00) from holding Skandinaviska Enskilda Banken or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Boliden AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Boliden AB |
Skandinaviska Enskilda and Boliden AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Boliden AB
The main advantage of trading using opposite Skandinaviska Enskilda and Boliden AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Boliden AB 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 Boliden AB will offset losses from the drop in Boliden AB's long position.| Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. TF Bank AB |
| Boliden AB vs. Sandvik AB | Boliden AB vs. AB SKF | Boliden AB vs. Alfa Laval AB | Boliden AB vs. AB Electrolux |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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