Correlation Between Nordic Iron and Skandinaviska Enskilda

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

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

Diversification Opportunities for Nordic Iron and Skandinaviska Enskilda

-0.81

Correlation Coefficient

Nordic Iron  Skandinaviska Enskilda

Pay attention - limited upside

The 3 months correlation between Nordic and Skandinaviska is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Iron Ore and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and Nordic Iron 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 Nordic Iron Ore 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 Nordic Iron i.e., Nordic Iron and Skandinaviska Enskilda go up and down completely randomly.

Pair Corralation between Nordic Iron and Skandinaviska Enskilda

Assuming the 90 days trading horizon Nordic Iron Ore is expected to under-perform the Skandinaviska Enskilda. In addition to that, Nordic Iron is 3.96 times more volatile than Skandinaviska Enskilda Banken. It trades about -0.12 of its total potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.2 per unit of volatility. If you would invest  14,555  in Skandinaviska Enskilda Banken on April 20, 2025 and sell it today you would earn a total of  2,080  from holding Skandinaviska Enskilda Banken or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Nordic Iron Ore  vs.  Skandinaviska Enskilda Banken

Nordic Iron Ore

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Iron Ore has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Skandinaviska Enskilda

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Skandinaviska Enskilda Banken are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Skandinaviska Enskilda unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nordic Iron and Skandinaviska Enskilda

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

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.