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
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and CirChem is -0.46. 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 generate 0.28 times more return on investment than CirChem AB. However, Skandinaviska Enskilda Banken is 3.6 times less risky than CirChem AB. It trades about 0.04 of its potential returns per unit of risk. CirChem AB is currently generating about 0.0 per unit of risk. If you would invest 11,882 in Skandinaviska Enskilda Banken on August 25, 2024 and sell it today you would earn a total of 3,378 from holding Skandinaviska Enskilda Banken or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| 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. Intervacc AB | CirChem AB vs. Alzinova AB | CirChem AB vs. Clinical Laserthermia Systems | CirChem AB vs. AAC Clyde Space |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |