Correlation Between Adventure Box and Skandinaviska Enskilda

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

By analyzing existing cross correlation between Adventure Box Technology and Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on Adventure Box 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 Adventure Box with a short position of Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adventure Box and Skandinaviska Enskilda.

Diversification Opportunities for Adventure Box and Skandinaviska Enskilda

-0.31

Correlation Coefficient

Adventure Box  Skandinaviska Enskilda

Very good diversification

The 3 months correlation between Adventure and Skandinaviska is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Adventure Box Technology and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Adventure Box 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 Adventure Box Technology 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 Adventure Box i.e., Adventure Box and Skandinaviska Enskilda go up and down completely randomly.

Pair Corralation between Adventure Box and Skandinaviska Enskilda

Assuming the 90 days trading horizon Adventure Box Technology is expected to generate 11.96 times more return on investment than Skandinaviska Enskilda. However, Adventure Box is 11.96 times more volatile than Skandinaviska Enskilda Banken. It trades about 0.02 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.05 per unit of risk. If you would invest  99.00  in Adventure Box Technology on October 26, 2024 and sell it today you would lose (82.00) from holding Adventure Box Technology or give up 82.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Adventure Box Technology  vs.  Skandinaviska Enskilda Banken

Adventure Box Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adventure Box Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Skandinaviska Enskilda

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Skandinaviska Enskilda Banken are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Skandinaviska Enskilda may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Adventure Box and Skandinaviska Enskilda

The main advantage of trading using opposite Adventure Box and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adventure Box 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.

The idea behind Adventure Box Technology and Skandinaviska Enskilda Banken 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.