Correlation Between Skandinaviska Enskilda and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC, you can compare the effects of market volatilities on Skandinaviska Enskilda and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and AstraZeneca PLC.
Diversification Opportunities for Skandinaviska Enskilda and AstraZeneca PLC
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skandinaviska and AstraZeneca is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and AstraZeneca PLC
Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 1.14 times more return on investment than AstraZeneca PLC. However, Skandinaviska Enskilda is 1.14 times more volatile than AstraZeneca PLC. It trades about 0.17 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.02 per unit of risk. If you would invest 14,620 in Skandinaviska Enskilda Banken on March 3, 2024 and sell it today you would earn a total of 640.00 from holding Skandinaviska Enskilda Banken or generate 4.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Skandinaviska Enskilda Banken vs. AstraZeneca PLC
Performance |
Timeline |
Skandinaviska Enskilda |
AstraZeneca PLC |
Skandinaviska Enskilda and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Skandinaviska Enskilda and AstraZeneca PLC
The main advantage of trading using opposite Skandinaviska Enskilda and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.Skandinaviska Enskilda vs. Svenska Handelsbanken AB | Skandinaviska Enskilda vs. Telia Company AB | Skandinaviska Enskilda vs. Tele2 AB | Skandinaviska Enskilda vs. H M Hennes |
AstraZeneca PLC vs. AB Volvo | AstraZeneca PLC vs. Telefonaktiebolaget LM Ericsson | AstraZeneca PLC vs. H M Hennes | AstraZeneca PLC vs. Investor AB ser |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |