Correlation Between Skandinaviska Enskilda and Desenio Group
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Desenio Group 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 Desenio Group 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 Desenio Group AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Desenio Group 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 Desenio Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Desenio Group.
Diversification Opportunities for Skandinaviska Enskilda and Desenio Group
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skandinaviska and Desenio is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Desenio Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desenio Group 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 Desenio Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desenio Group AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Desenio Group go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Desenio Group
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 3.03 times less return on investment than Desenio Group. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 6.58 times less risky than Desenio Group. It trades about 0.04 of its potential returns per unit of risk. Desenio Group AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 46.00 in Desenio Group AB on August 25, 2024 and sell it today you would lose (17.00) from holding Desenio Group AB or give up 36.96% 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. Desenio Group AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Desenio Group AB |
Skandinaviska Enskilda and Desenio Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Desenio Group
The main advantage of trading using opposite Skandinaviska Enskilda and Desenio Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Desenio Group 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 Desenio Group will offset losses from the drop in Desenio Group's long position.| Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. TF Bank AB |
| Desenio Group vs. Cint Group AB | Desenio Group vs. Fractal Gaming Group | Desenio Group vs. Pierce Group AB | Desenio Group vs. Lyko Group A |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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