Correlation Between SenzaGen and Scandinavian Enviro
Can any of the company-specific risk be diversified away by investing in both SenzaGen and Scandinavian Enviro 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 SenzaGen and Scandinavian Enviro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SenzaGen AB and Scandinavian Enviro Systems, you can compare the effects of market volatilities on SenzaGen and Scandinavian Enviro 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 SenzaGen with a short position of Scandinavian Enviro. Check out your portfolio center. Please also check ongoing floating volatility patterns of SenzaGen and Scandinavian Enviro.
Diversification Opportunities for SenzaGen and Scandinavian Enviro
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SenzaGen and Scandinavian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SenzaGen AB and Scandinavian Enviro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Enviro and SenzaGen 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 SenzaGen AB are associated (or correlated) with Scandinavian Enviro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Enviro has no effect on the direction of SenzaGen i.e., SenzaGen and Scandinavian Enviro go up and down completely randomly.
Pair Corralation between SenzaGen and Scandinavian Enviro
Assuming the 90 days trading horizon SenzaGen AB is expected to generate 0.74 times more return on investment than Scandinavian Enviro. However, SenzaGen AB is 1.35 times less risky than Scandinavian Enviro. It trades about -0.06 of its potential returns per unit of risk. Scandinavian Enviro Systems is currently generating about -0.11 per unit of risk. If you would invest 715.00 in SenzaGen AB on September 1, 2024 and sell it today you would lose (20.00) from holding SenzaGen AB or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SenzaGen AB vs. Scandinavian Enviro Systems
Performance |
| Timeline |
| SenzaGen AB |
| Scandinavian Enviro |
SenzaGen and Scandinavian Enviro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SenzaGen and Scandinavian Enviro
The main advantage of trading using opposite SenzaGen and Scandinavian Enviro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SenzaGen position performs unexpectedly, Scandinavian Enviro 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 Scandinavian Enviro will offset losses from the drop in Scandinavian Enviro's long position.The idea behind SenzaGen AB and Scandinavian Enviro Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Scandinavian Enviro vs. Minesto AB | Scandinavian Enviro vs. Sivers IMA Holding | Scandinavian Enviro vs. SolTech Energy Sweden | Scandinavian Enviro vs. AAC Clyde Space |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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