Correlation Between Skandinaviska Enskilda and Bulten AB
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Bulten 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 Bulten 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 Bulten AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Bulten 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 Bulten AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Bulten AB.
Diversification Opportunities for Skandinaviska Enskilda and Bulten AB
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skandinaviska and Bulten is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Bulten AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bulten 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 Bulten AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bulten AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Bulten AB go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Bulten AB
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.49 times more return on investment than Bulten AB. However, Skandinaviska Enskilda Banken is 2.05 times less risky than Bulten AB. It trades about 0.13 of its potential returns per unit of risk. Bulten AB is currently generating about -0.1 per unit of risk. If you would invest 16,525 in Skandinaviska Enskilda Banken on November 28, 2024 and sell it today you would earn a total of 580.00 from holding Skandinaviska Enskilda Banken or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Bulten AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Bulten AB |
Skandinaviska Enskilda and Bulten AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Bulten AB
The main advantage of trading using opposite Skandinaviska Enskilda and Bulten AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Bulten 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 Bulten AB will offset losses from the drop in Bulten AB'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 |
| Bulten AB vs. Inwido AB | Bulten AB vs. Clas Ohlson AB | Bulten AB vs. Bufab Holding AB | Bulten AB vs. Byggmax 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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