Correlation Between Skandinaviska Enskilda and UTD OV

Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and UTD OV 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 UTD OV 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 UTD OV BK LOC ADR1, you can compare the effects of market volatilities on Skandinaviska Enskilda and UTD OV 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 UTD OV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and UTD OV.

Diversification Opportunities for Skandinaviska Enskilda and UTD OV

0.0

Correlation Coefficient

Skandinaviska Enskilda  UTD OV

Pay attention - limited upside

The 3 months correlation between Skandinaviska and UTD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and UTD OV BK LOC ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTD OV BK 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 UTD OV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTD OV BK has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and UTD OV go up and down completely randomly.

Pair Corralation between Skandinaviska Enskilda and UTD OV

If you would invest  1,320  in Skandinaviska Enskilda Banken on October 10, 2024 and sell it today you would earn a total of  50.00  from holding Skandinaviska Enskilda Banken or generate 3.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Skandinaviska Enskilda Banken  vs.  UTD OV BK LOC ADR1

Skandinaviska Enskilda

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skandinaviska Enskilda Banken are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Skandinaviska Enskilda is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

UTD OV BK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UTD OV BK LOC ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, UTD OV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Skandinaviska Enskilda and UTD OV

The main advantage of trading using opposite Skandinaviska Enskilda and UTD OV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, UTD OV 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 UTD OV will offset losses from the drop in UTD OV's long position.

The idea behind Skandinaviska Enskilda Banken and UTD OV BK LOC ADR1 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.