Correlation Between Skandinaviska Enskilda and COOR Service
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and COOR Service 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 COOR Service 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 COOR Service Management, you can compare the effects of market volatilities on Skandinaviska Enskilda and COOR Service 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 COOR Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and COOR Service.
Diversification Opportunities for Skandinaviska Enskilda and COOR Service
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skandinaviska and COOR is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and COOR Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COOR Service Management 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 COOR Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COOR Service Management has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and COOR Service go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and COOR Service
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.67 times more return on investment than COOR Service. However, Skandinaviska Enskilda Banken is 1.49 times less risky than COOR Service. It trades about 0.06 of its potential returns per unit of risk. COOR Service Management 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. COOR Service Management
Performance |
| Timeline |
| Skandinaviska Enskilda |
| COOR Service Management |
Skandinaviska Enskilda and COOR Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and COOR Service
The main advantage of trading using opposite Skandinaviska Enskilda and COOR Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, COOR Service 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 COOR Service will offset losses from the drop in COOR Service'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 |
| COOR Service vs. Inwido AB | COOR Service vs. Cloetta AB | COOR Service vs. Clas Ohlson AB | COOR Service vs. Bufab Holding 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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