Correlation Between Skandinaviska Enskilda and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Alaska Air 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 Alaska Air 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 Alaska Air Group, you can compare the effects of market volatilities on Skandinaviska Enskilda and Alaska Air 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 Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Alaska Air.
Diversification Opportunities for Skandinaviska Enskilda and Alaska Air
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skandinaviska and Alaska is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Alaska Air go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Alaska Air
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.82 times more return on investment than Alaska Air. However, Skandinaviska Enskilda Banken is 1.22 times less risky than Alaska Air. It trades about 0.09 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.06 per unit of risk. If you would invest 812.00 in Skandinaviska Enskilda Banken on September 12, 2024 and sell it today you would earn a total of 534.00 from holding Skandinaviska Enskilda Banken or generate 65.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Alaska Air Group
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Alaska Air Group |
Skandinaviska Enskilda and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Alaska Air
The main advantage of trading using opposite Skandinaviska Enskilda and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Skandinaviska Enskilda vs. Alaska Air Group | Skandinaviska Enskilda vs. COLUMBIA SPORTSWEAR | Skandinaviska Enskilda vs. Universal Display | Skandinaviska Enskilda vs. WIZZ AIR HLDGUNSPADR4 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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