Correlation Between Wise Group and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Wise Group 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 Wise Group and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wise Group AB and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Wise Group 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 Wise Group with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wise Group and Skandinaviska Enskilda.
Diversification Opportunities for Wise Group and Skandinaviska Enskilda
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wise and Skandinaviska is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wise Group 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 Wise Group 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 Wise Group 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 Wise Group i.e., Wise Group and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Wise Group and Skandinaviska Enskilda
Assuming the 90 days trading horizon Wise Group AB is expected to under-perform the Skandinaviska Enskilda. In addition to that, Wise Group is 3.17 times more volatile than Skandinaviska Enskilda Banken. It trades about -0.09 of its total potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.09 per unit of volatility. If you would invest 15,400 in Skandinaviska Enskilda Banken on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Skandinaviska Enskilda Banken or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wise Group AB vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Wise Group AB |
| Skandinaviska Enskilda |
Wise Group and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wise Group and Skandinaviska Enskilda
The main advantage of trading using opposite Wise Group and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wise Group 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.| Wise Group vs. Skandinaviska Enskilda Banken | Wise Group vs. Skandinaviska Enskilda Banken | Wise Group vs. Swedbank AB | Wise Group vs. Svenska Handelsbanken AB |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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