Correlation Between Skandinaviska Enskilda and CirChem AB
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and CirChem 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 CirChem 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 CirChem AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and CirChem 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 CirChem AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and CirChem AB.
Diversification Opportunities for Skandinaviska Enskilda and CirChem AB
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and CirChem is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and CirChem AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CirChem 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 CirChem AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CirChem AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and CirChem AB go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and CirChem AB
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to under-perform the CirChem AB. But the stock apears to be less risky and, when comparing its historical volatility, Skandinaviska Enskilda Banken is 4.97 times less risky than CirChem AB. The stock trades about -0.09 of its potential returns per unit of risk. The CirChem AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 265.00 in CirChem AB on August 29, 2024 and sell it today you would earn a total of 26.00 from holding CirChem AB or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. CirChem AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| CirChem AB |
Skandinaviska Enskilda and CirChem AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and CirChem AB
The main advantage of trading using opposite Skandinaviska Enskilda and CirChem AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, CirChem 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 CirChem AB will offset losses from the drop in CirChem AB's long position.| Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. TF Bank AB |
| CirChem AB vs. Storytel AB | CirChem AB vs. Stillfront Group AB | CirChem AB vs. Hexatronic Group AB | CirChem AB vs. Jetpak Top Holding |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |