Correlation Between Skandinaviska Enskilda and Diagonal Bio
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Diagonal Bio 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 Diagonal Bio 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 Diagonal Bio AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Diagonal Bio 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 Diagonal Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Diagonal Bio.
Diversification Opportunities for Skandinaviska Enskilda and Diagonal Bio
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and Diagonal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Diagonal Bio AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diagonal Bio 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 Diagonal Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diagonal Bio AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Diagonal Bio go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Diagonal Bio
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.17 times more return on investment than Diagonal Bio. However, Skandinaviska Enskilda Banken is 6.05 times less risky than Diagonal Bio. It trades about -0.12 of its potential returns per unit of risk. Diagonal Bio AB is currently generating about -0.08 per unit of risk. If you would invest 15,375 in Skandinaviska Enskilda Banken on August 30, 2024 and sell it today you would lose (465.00) from holding Skandinaviska Enskilda Banken or give up 3.02% 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. Diagonal Bio AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Diagonal Bio AB |
Skandinaviska Enskilda and Diagonal Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Diagonal Bio
The main advantage of trading using opposite Skandinaviska Enskilda and Diagonal Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Diagonal Bio 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 Diagonal Bio will offset losses from the drop in Diagonal Bio'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 |
| Diagonal Bio vs. AstraZeneca PLC | Diagonal Bio vs. Investor AB ser | Diagonal Bio vs. Investor AB ser | Diagonal Bio vs. Atlas Copco 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |