Correlation Between Svenska Handelsbanken and Enad Global
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Enad Global 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 Svenska Handelsbanken and Enad Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and Enad Global 7, you can compare the effects of market volatilities on Svenska Handelsbanken and Enad Global 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 Svenska Handelsbanken with a short position of Enad Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Enad Global.
Diversification Opportunities for Svenska Handelsbanken and Enad Global
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Svenska and Enad is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Enad Global 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enad Global 7 and Svenska Handelsbanken 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 Svenska Handelsbanken AB are associated (or correlated) with Enad Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enad Global 7 has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Enad Global go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Enad Global
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 14.5 times less return on investment than Enad Global. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 2.84 times less risky than Enad Global. It trades about 0.05 of its potential returns per unit of risk. Enad Global 7 is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,398 in Enad Global 7 on September 24, 2024 and sell it today you would earn a total of 224.00 from holding Enad Global 7 or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Enad Global 7
Performance |
| Timeline |
| Svenska Handelsbanken |
| Enad Global 7 |
Svenska Handelsbanken and Enad Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Enad Global
The main advantage of trading using opposite Svenska Handelsbanken and Enad Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Enad Global 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 Enad Global will offset losses from the drop in Enad Global's long position.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB | Svenska Handelsbanken vs. Investor AB ser |
| Enad Global vs. Samhllsbyggnadsbolaget i Norden | Enad Global vs. Sinch AB | Enad Global vs. Zaptec AS | Enad Global vs. Evolution AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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