Correlation Between Skandinaviska Enskilda and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Addtech 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 Addtech 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 Addtech AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Addtech 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Addtech AB.
Diversification Opportunities for Skandinaviska Enskilda and Addtech AB
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skandinaviska and Addtech is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Addtech AB go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Addtech AB
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 3.02 times less return on investment than Addtech AB. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 1.46 times less risky than Addtech AB. It trades about 0.04 of its potential returns per unit of risk. Addtech AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15,529 in Addtech AB on August 28, 2024 and sell it today you would earn a total of 14,591 from holding Addtech AB or generate 93.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Addtech AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Addtech AB |
Skandinaviska Enskilda and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Addtech AB
The main advantage of trading using opposite Skandinaviska Enskilda and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Addtech 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Skandinaviska Enskilda vs. SaltX Technology Holding | Skandinaviska Enskilda vs. Investment AB Oresund | Skandinaviska Enskilda vs. Raketech Group Holding | Skandinaviska Enskilda vs. JLT Mobile Computers |
| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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