Correlation Between Scandinavian Enviro and OXE Marine

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

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

Diversification Opportunities for Scandinavian Enviro and OXE Marine

0.59

Correlation Coefficient

Scandinavian Enviro  OXE Marine

Very weak diversification

The 3 months correlation between Scandinavian and OXE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Enviro Systems and OXE Marine AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OXE Marine AB and Scandinavian Enviro 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 Scandinavian Enviro Systems are associated (or correlated) with OXE Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OXE Marine AB has no effect on the direction of Scandinavian Enviro i.e., Scandinavian Enviro and OXE Marine go up and down completely randomly.

Pair Corralation between Scandinavian Enviro and OXE Marine

Assuming the 90 days trading horizon Scandinavian Enviro Systems is expected to under-perform the OXE Marine. But the stock apears to be less risky and, when comparing its historical volatility, Scandinavian Enviro Systems is 3.21 times less risky than OXE Marine. The stock trades about -0.2 of its potential returns per unit of risk. The OXE Marine AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  44.00  in OXE Marine AB on August 31, 2024 and sell it today you would lose (5.00) from holding OXE Marine AB or give up 11.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Scandinavian Enviro Systems  vs.  OXE Marine AB

Scandinavian Enviro

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

OXE Marine AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Scandinavian Enviro and OXE Marine

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

The idea behind Scandinavian Enviro Systems and OXE Marine AB 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..