Correlation Between Sivers IMA and Scandinavian Enviro
Can any of the company-specific risk be diversified away by investing in both Sivers IMA 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 Sivers IMA and Scandinavian Enviro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sivers IMA Holding and Scandinavian Enviro Systems, you can compare the effects of market volatilities on Sivers IMA 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 Sivers IMA with a short position of Scandinavian Enviro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sivers IMA and Scandinavian Enviro.
Diversification Opportunities for Sivers IMA and Scandinavian Enviro
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sivers and Scandinavian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sivers IMA Holding and Scandinavian Enviro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Enviro and Sivers IMA 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 Sivers IMA Holding 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 Sivers IMA i.e., Sivers IMA and Scandinavian Enviro go up and down completely randomly.
Pair Corralation between Sivers IMA and Scandinavian Enviro
Assuming the 90 days trading horizon Sivers IMA Holding is expected to under-perform the Scandinavian Enviro. In addition to that, Sivers IMA is 4.77 times more volatile than Scandinavian Enviro Systems. It trades about -0.09 of its total potential returns per unit of risk. Scandinavian Enviro Systems is currently generating about -0.13 per unit of volatility. If you would invest 204.00 in Scandinavian Enviro Systems on August 31, 2024 and sell it today you would lose (15.00) from holding Scandinavian Enviro Systems or give up 7.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sivers IMA Holding vs. Scandinavian Enviro Systems
Performance |
| Timeline |
| Sivers IMA Holding |
| Scandinavian Enviro |
Sivers IMA and Scandinavian Enviro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sivers IMA and Scandinavian Enviro
The main advantage of trading using opposite Sivers IMA and Scandinavian Enviro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sivers IMA 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.| Sivers IMA vs. Hexatronic Group AB | Sivers IMA vs. Sinch AB | Sivers IMA vs. Embracer Group AB | Sivers IMA vs. SolTech Energy Sweden |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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