Correlation Between Skandinaviska Enskilda and TF Bank
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and TF Bank 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 TF Bank 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 TF Bank AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and TF Bank 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 TF Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and TF Bank.
Diversification Opportunities for Skandinaviska Enskilda and TF Bank
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skandinaviska and TFBANK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and TF Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TF Bank 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 TF Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TF Bank AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and TF Bank go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and TF Bank
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.79 times more return on investment than TF Bank. However, Skandinaviska Enskilda Banken is 1.27 times less risky than TF Bank. It trades about -0.06 of its potential returns per unit of risk. TF Bank AB is currently generating about -0.12 per unit of risk. If you would invest 15,440 in Skandinaviska Enskilda Banken on August 27, 2024 and sell it today you would lose (260.00) from holding Skandinaviska Enskilda Banken or give up 1.68% 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. TF Bank AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| TF Bank AB |
Skandinaviska Enskilda and TF Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and TF Bank
The main advantage of trading using opposite Skandinaviska Enskilda and TF Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, TF Bank 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 TF Bank will offset losses from the drop in TF Bank's long position.The idea behind Skandinaviska Enskilda Banken and TF Bank AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TF Bank vs. Creades AB | TF Bank vs. L E Lundbergfretagen | TF Bank vs. Industrivarden AB ser | TF Bank vs. Investment AB Latour |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |