Correlation Between Crédit Agricole and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both Crédit Agricole 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 Crédit Agricole and Skandinaviska Enskilda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crdit Agricole SA and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Crédit Agricole 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 Crédit Agricole with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crédit Agricole and Skandinaviska Enskilda.
Diversification Opportunities for Crédit Agricole and Skandinaviska Enskilda
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Crédit and Skandinaviska is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Crédit Agricole 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 Crdit Agricole SA 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 Crédit Agricole i.e., Crédit Agricole and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between Crédit Agricole and Skandinaviska Enskilda
Assuming the 90 days horizon Crédit Agricole is expected to generate 3.82 times less return on investment than Skandinaviska Enskilda. But when comparing it to its historical volatility, Crdit Agricole SA is 4.15 times less risky than Skandinaviska Enskilda. It trades about 0.06 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 412.00 in Skandinaviska Enskilda Banken on October 15, 2024 and sell it today you would earn a total of 946.00 from holding Skandinaviska Enskilda Banken or generate 229.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crdit Agricole SA vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| Crdit Agricole SA |
| Skandinaviska Enskilda |
Crédit Agricole and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crédit Agricole and Skandinaviska Enskilda
The main advantage of trading using opposite Crédit Agricole and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crédit Agricole 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.| Crédit Agricole vs. Sterling Construction | Crédit Agricole vs. AM EAGLE OUTFITTERS | Crédit Agricole vs. Daito Trust Construction | Crédit Agricole vs. Hanison Construction Holdings |
| Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Hang Seng Bank | Skandinaviska Enskilda vs. United Overseas Bank | Skandinaviska Enskilda vs. China Resources Land |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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