Correlation Between Acconeer and Scandinavian Enviro

Can any of the company-specific risk be diversified away by investing in both Acconeer 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 Acconeer and Scandinavian Enviro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acconeer AB and Scandinavian Enviro Systems, you can compare the effects of market volatilities on Acconeer 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 Acconeer with a short position of Scandinavian Enviro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acconeer and Scandinavian Enviro.

Diversification Opportunities for Acconeer and Scandinavian Enviro

0.25

Correlation Coefficient

Acconeer  Scandinavian Enviro

Modest diversification

The 3 months correlation between Acconeer and Scandinavian is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Acconeer AB and Scandinavian Enviro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Enviro and Acconeer 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 Acconeer AB 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 Acconeer i.e., Acconeer and Scandinavian Enviro go up and down completely randomly.

Pair Corralation between Acconeer and Scandinavian Enviro

Assuming the 90 days trading horizon Acconeer AB is expected to generate 1.34 times more return on investment than Scandinavian Enviro. However, Acconeer is 1.34 times more volatile than Scandinavian Enviro Systems. It trades about 0.0 of its potential returns per unit of risk. Scandinavian Enviro Systems is currently generating about -0.07 per unit of risk. If you would invest  565.00  in Acconeer AB on November 29, 2024 and sell it today you would lose (20.00) from holding Acconeer AB or give up 3.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Acconeer AB  vs.  Scandinavian Enviro Systems

Acconeer AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acconeer AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Acconeer is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Scandinavian Enviro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scandinavian Enviro Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Acconeer and Scandinavian Enviro

The main advantage of trading using opposite Acconeer and Scandinavian Enviro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acconeer 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.

The idea behind Acconeer AB and Scandinavian Enviro Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.