Correlation Between SBB-B and Skandinaviska Enskilda

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

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

Diversification Opportunities for SBB-B and Skandinaviska Enskilda

0.73

Correlation Coefficient

SBB-B  Skandinaviska Enskilda

Poor diversification

The 3 months correlation between SBB-B and Skandinaviska is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda and SBB-B 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 Samhllsbyggnadsbolaget i Norden 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 SBB-B i.e., SBB-B and Skandinaviska Enskilda go up and down completely randomly.

Pair Corralation between SBB-B and Skandinaviska Enskilda

Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to generate 5.22 times more return on investment than Skandinaviska Enskilda. However, SBB-B is 5.22 times more volatile than Skandinaviska Enskilda Banken. It trades about 0.11 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.14 per unit of risk. If you would invest  391.00  in Samhllsbyggnadsbolaget i Norden on April 25, 2025 and sell it today you would earn a total of  139.00  from holding Samhllsbyggnadsbolaget i Norden or generate 35.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Samhllsbyggnadsbolaget i Norde  vs.  Skandinaviska Enskilda Banken

Samhllsbyggnadsbolaget

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samhllsbyggnadsbolaget i Norden are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBB-B unveiled solid returns over the last few months and may actually be approaching a breakup point.

Skandinaviska Enskilda

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Skandinaviska Enskilda Banken are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Skandinaviska Enskilda may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SBB-B and Skandinaviska Enskilda

The main advantage of trading using opposite SBB-B and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-B 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 Samhllsbyggnadsbolaget i Norden 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.