Correlation Between Svenska Handelsbanken and Enersize
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken and Enersize 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 Enersize 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 Enersize Oy, you can compare the effects of market volatilities on Svenska Handelsbanken and Enersize 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 Enersize. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Enersize.
Diversification Opportunities for Svenska Handelsbanken and Enersize
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and Enersize is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy 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 Enersize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersize Oy has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and Enersize go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Enersize
Assuming the 90 days trading horizon Svenska Handelsbanken AB is expected to generate 0.1 times more return on investment than Enersize. However, Svenska Handelsbanken AB is 9.75 times less risky than Enersize. It trades about -0.02 of its potential returns per unit of risk. Enersize Oy is currently generating about -0.11 per unit of risk. If you would invest 11,230 in Svenska Handelsbanken AB on August 30, 2024 and sell it today you would lose (50.00) from holding Svenska Handelsbanken AB or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. Enersize Oy
Performance |
| Timeline |
| Svenska Handelsbanken |
| Enersize Oy |
Svenska Handelsbanken and Enersize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Enersize
The main advantage of trading using opposite Svenska Handelsbanken and Enersize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken position performs unexpectedly, Enersize 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 Enersize will offset losses from the drop in Enersize's long position.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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