Correlation Between Skandinaviska Enskilda and Vef AB
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Vef 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 Vef 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 Vef AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Vef 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 Vef AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Vef AB.
Diversification Opportunities for Skandinaviska Enskilda and Vef AB
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Skandinaviska and Vef is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Vef AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vef 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 Vef AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vef AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Vef AB go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Vef AB
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.46 times more return on investment than Vef AB. However, Skandinaviska Enskilda Banken is 2.16 times less risky than Vef AB. It trades about 0.51 of its potential returns per unit of risk. Vef AB is currently generating about -0.07 per unit of risk. If you would invest 16,180 in Skandinaviska Enskilda Banken on December 1, 2024 and sell it today you would earn a total of 1,680 from holding Skandinaviska Enskilda Banken or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Vef AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Vef AB |
Skandinaviska Enskilda and Vef AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Vef AB
The main advantage of trading using opposite Skandinaviska Enskilda and Vef AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Vef 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 Vef AB will offset losses from the drop in Vef AB's long position.| Skandinaviska Enskilda vs. Avanza Bank Holding | Skandinaviska Enskilda vs. Norion Bank | Skandinaviska Enskilda vs. Nordea Bank Abp | Skandinaviska Enskilda vs. Arion banki hf |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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