Correlation Between Swedbank and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Swedbank and Skandinaviska Enskilda 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 Swedbank and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedbank AB and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Swedbank and Skandinaviska Enskilda 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 Swedbank with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedbank and Skandinaviska Enskilda.
Diversification Opportunities for Swedbank and Skandinaviska Enskilda
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swedbank and Skandinaviska is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank AB and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Swedbank 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 Swedbank AB are associated (or correlated) with Skandinaviska Enskilda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skandinaviska Enskilda has no effect on the direction of Swedbank i.e., Swedbank and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Swedbank and Skandinaviska Enskilda
Assuming the 90 days trading horizon Swedbank AB is expected to under-perform the Skandinaviska Enskilda. But the stock apears to be less risky and, when comparing its historical volatility, Swedbank AB is 1.03 times less risky than Skandinaviska Enskilda. The stock trades about -0.15 of its potential returns per unit of risk. The Skandinaviska Enskilda Banken is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 15,250 in Skandinaviska Enskilda Banken on August 28, 2024 and sell it today you would lose (195.00) from holding Skandinaviska Enskilda Banken or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedbank AB vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Swedbank AB |
| Skandinaviska Enskilda |
Swedbank and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedbank and Skandinaviska Enskilda
The main advantage of trading using opposite Swedbank and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank position performs unexpectedly, Skandinaviska Enskilda 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 Skandinaviska Enskilda will offset losses from the drop in Skandinaviska Enskilda's long position.| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Nordea Bank Abp | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB |
| Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. TF Bank 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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