Correlation Between Skandinaviska Enskilda and Bravida Holding
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Bravida Holding 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 Bravida Holding 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 Bravida Holding AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Bravida Holding 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 Bravida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Bravida Holding.
Diversification Opportunities for Skandinaviska Enskilda and Bravida Holding
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Skandinaviska and Bravida is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Bravida Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravida Holding 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 Bravida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravida Holding AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Bravida Holding go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Bravida Holding
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.69 times more return on investment than Bravida Holding. However, Skandinaviska Enskilda Banken is 1.44 times less risky than Bravida Holding. It trades about 0.06 of its potential returns per unit of risk. Bravida Holding AB is currently generating about 0.02 per unit of risk. If you would invest 12,883 in Skandinaviska Enskilda Banken on September 14, 2024 and sell it today you would earn a total of 2,622 from holding Skandinaviska Enskilda Banken or generate 20.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Bravida Holding AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Bravida Holding AB |
Skandinaviska Enskilda and Bravida Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Bravida Holding
The main advantage of trading using opposite Skandinaviska Enskilda and Bravida Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Bravida Holding 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 Bravida Holding will offset losses from the drop in Bravida Holding'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 |
| Bravida Holding vs. Nolato AB | Bravida Holding vs. Indutrade AB | Bravida Holding vs. HEXPOL AB | Bravida Holding vs. Addtech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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