Correlation Between Skandinaviska Enskilda and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Lloyds Banking 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 Lloyds Banking 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 Lloyds Banking Group, you can compare the effects of market volatilities on Skandinaviska Enskilda and Lloyds Banking 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 Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Lloyds Banking.
Diversification Opportunities for Skandinaviska Enskilda and Lloyds Banking
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skandinaviska and Lloyds is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking 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 Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Lloyds Banking go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Lloyds Banking
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 2.76 times more return on investment than Lloyds Banking. However, Skandinaviska Enskilda is 2.76 times more volatile than Lloyds Banking Group. It trades about 0.06 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.03 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Lloyds Banking Group
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Lloyds Banking Group |
Skandinaviska Enskilda and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Lloyds Banking
The main advantage of trading using opposite Skandinaviska Enskilda and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking'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 |
| Lloyds Banking vs. United Natural Foods | Lloyds Banking vs. APPLIED MATERIALS | Lloyds Banking vs. SANOK RUBBER ZY | Lloyds Banking vs. BG Foods |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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