Correlation Between Skandinaviska Enskilda and Realfiction Holding
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Realfiction 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 Realfiction 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 Realfiction Holding AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Realfiction 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 Realfiction Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Realfiction Holding.
Diversification Opportunities for Skandinaviska Enskilda and Realfiction Holding
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and Realfiction is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Realfiction Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realfiction Holding 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 Realfiction Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realfiction Holding has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Realfiction Holding go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Realfiction Holding
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 2.94 times less return on investment than Realfiction Holding. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 3.98 times less risky than Realfiction Holding. It trades about 0.03 of its potential returns per unit of risk. Realfiction Holding AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,188 in Realfiction Holding AB on November 5, 2024 and sell it today you would earn a total of 4.00 from holding Realfiction Holding AB or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Realfiction Holding AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Realfiction Holding |
Skandinaviska Enskilda and Realfiction Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Realfiction Holding
The main advantage of trading using opposite Skandinaviska Enskilda and Realfiction Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Realfiction 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 Realfiction Holding will offset losses from the drop in Realfiction 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 |
| Realfiction Holding vs. Sivers IMA Holding | Realfiction Holding vs. AAC Clyde Space | Realfiction Holding vs. Kancera AB | Realfiction Holding vs. Bambuser 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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