Correlation Between Skandinaviska Enskilda and DistIT AB

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

Diversification Opportunities for Skandinaviska Enskilda and DistIT AB

-0.87

Correlation Coefficient

Skandinaviska Enskilda  DistIT AB

Pay attention - limited upside

The 3 months correlation between Skandinaviska and DistIT is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and DistIT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DistIT AB 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 DistIT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DistIT AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and DistIT AB go up and down completely randomly.

Pair Corralation between Skandinaviska Enskilda and DistIT AB

Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 4.47 times less return on investment than DistIT AB. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 7.22 times less risky than DistIT AB. It trades about 0.16 of its potential returns per unit of risk. DistIT AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  43.00  in DistIT AB on April 22, 2025 and sell it today you would earn a total of  5.00  from holding DistIT AB or generate 11.63% return on investment over 90 days.

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

Skandinaviska Enskilda Banken  vs.  DistIT AB

Skandinaviska Enskilda

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Skandinaviska Enskilda Banken are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Skandinaviska Enskilda may actually be approaching a critical reversion point that can send shares even higher in August 2025.

DistIT AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days DistIT AB 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.

Pair Trading with Skandinaviska Enskilda and DistIT AB

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

The idea behind Skandinaviska Enskilda Banken and DistIT 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.