Correlation Between Skandinaviska Enskilda and United Overseas
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on Skandinaviska Enskilda and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and United Overseas.
Diversification Opportunities for Skandinaviska Enskilda and United Overseas
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skandinaviska and United is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and United Overseas go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and United Overseas
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 1.47 times more return on investment than United Overseas. However, Skandinaviska Enskilda is 1.47 times more volatile than United Overseas Bank. It trades about 0.06 of its potential returns per unit of risk. United Overseas Bank is currently generating about 0.06 per unit of risk. If you would invest 846.00 in Skandinaviska Enskilda Banken on September 3, 2024 and sell it today you would earn a total of 461.00 from holding Skandinaviska Enskilda Banken or generate 54.49% 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. United Overseas Bank
Performance |
| Timeline |
| Skandinaviska Enskilda |
| United Overseas Bank |
Skandinaviska Enskilda and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and United Overseas
The main advantage of trading using opposite Skandinaviska Enskilda and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| Skandinaviska Enskilda vs. WT OFFSHORE | Skandinaviska Enskilda vs. Chongqing Machinery Electric | Skandinaviska Enskilda vs. SOLSTAD OFFSHORE NK | Skandinaviska Enskilda vs. Nufarm Limited |
| United Overseas vs. Waste Management | United Overseas vs. Bumrungrad Hospital Public | United Overseas vs. American Eagle Outfitters | United Overseas vs. Jacquet Metal Service |
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.
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