Correlation Between Skandinaviska Enskilda and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and CaixaBank 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 CaixaBank 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 CaixaBank SA, you can compare the effects of market volatilities on Skandinaviska Enskilda and CaixaBank 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 CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and CaixaBank.
Diversification Opportunities for Skandinaviska Enskilda and CaixaBank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Skandinaviska and CaixaBank is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA 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 CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and CaixaBank go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and CaixaBank
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 3.19 times more return on investment than CaixaBank. However, Skandinaviska Enskilda is 3.19 times more volatile than CaixaBank SA. It trades about 0.06 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.07 per unit of risk. If you would invest 412.00 in Skandinaviska Enskilda Banken on October 15, 2024 and sell it today you would earn a total of 946.00 from holding Skandinaviska Enskilda Banken or generate 229.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. CaixaBank SA
Performance |
| Timeline |
| Skandinaviska Enskilda |
| CaixaBank SA |
Skandinaviska Enskilda and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and CaixaBank
The main advantage of trading using opposite Skandinaviska Enskilda and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, CaixaBank 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 CaixaBank will offset losses from the drop in CaixaBank's long position.| Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Hang Seng Bank | Skandinaviska Enskilda vs. United Overseas Bank | Skandinaviska Enskilda vs. China Resources Land |
| CaixaBank vs. AEGEAN AIRLINES | CaixaBank vs. The Hanover Insurance | CaixaBank vs. Cincinnati Financial Corp | CaixaBank vs. Virtu Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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