Correlation Between Skanska AB and China State
Can any of the company-specific risk be diversified away by investing in both Skanska AB and China State 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 Skanska AB and China State into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skanska AB ser and China State Construction, you can compare the effects of market volatilities on Skanska AB and China State 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 Skanska AB with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skanska AB and China State.
Diversification Opportunities for Skanska AB and China State
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skanska and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Skanska AB ser and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Skanska AB 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 Skanska AB ser are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Skanska AB i.e., Skanska AB and China State go up and down completely randomly.
Pair Corralation between Skanska AB and China State
Assuming the 90 days horizon Skanska AB ser is expected to generate 0.31 times more return on investment than China State. However, Skanska AB ser is 3.27 times less risky than China State. It trades about 0.01 of its potential returns per unit of risk. China State Construction is currently generating about -0.06 per unit of risk. If you would invest 2,100 in Skanska AB ser on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Skanska AB ser or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skanska AB ser vs. China State Construction
Performance |
| Timeline |
| Skanska AB ser |
| China State Construction |
Skanska AB and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skanska AB and China State
The main advantage of trading using opposite Skanska AB and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skanska AB position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.| Skanska AB vs. Arcadis NV | Skanska AB vs. China Railway Group | Skanska AB vs. Digital Locations | Skanska AB vs. Koss Corporation |
| China State vs. Kenon Holdings | China State vs. Vistra Energy Corp | China State vs. CenterPoint Energy | China State vs. Corporacion America Airports |
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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