Correlation Between Skandinaviska Enskilda and Canon
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Canon 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 Skandinaviska Enskilda and Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skandinaviska Enskilda Banken and Canon Inc, you can compare the effects of market volatilities on Skandinaviska Enskilda and Canon 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 Skandinaviska Enskilda with a short position of Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Canon.
Diversification Opportunities for Skandinaviska Enskilda and Canon
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skandinaviska and Canon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc and Skandinaviska Enskilda 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 Skandinaviska Enskilda Banken are associated (or correlated) with Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Canon go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Canon
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 1.14 times less return on investment than Canon. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 1.1 times less risky than Canon. It trades about 0.06 of its potential returns per unit of risk. Canon Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,844 in Canon Inc on September 23, 2024 and sell it today you would earn a total of 1,236 from holding Canon Inc or generate 67.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Canon Inc
Performance |
Timeline |
Skandinaviska Enskilda |
Canon Inc |
Skandinaviska Enskilda and Canon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Skandinaviska Enskilda and Canon
The main advantage of trading using opposite Skandinaviska Enskilda and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.Skandinaviska Enskilda vs. POSBO UNSPADRS20YC1 | Skandinaviska Enskilda vs. Postal Savings Bank | Skandinaviska Enskilda vs. Truist Financial | Skandinaviska Enskilda vs. OVERSEA CHINUNSPADR2 |
Canon vs. Canon Inc | Canon vs. Ricoh Company | Canon vs. Brother Industries | Canon vs. Canon Marketing Japan |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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