Correlation Between Skandinaviska Enskilda and Proact IT

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

Diversification Opportunities for Skandinaviska Enskilda and Proact IT

-0.28

Correlation Coefficient

Skandinaviska Enskilda  Proact IT

Very good diversification

The 3 months correlation between Skandinaviska and Proact is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Proact IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proact IT Group 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 Proact IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proact IT Group has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Proact IT go up and down completely randomly.

Pair Corralation between Skandinaviska Enskilda and Proact IT

Assuming the 90 days trading horizon Skandinaviska Enskilda Banken is expected to generate 0.64 times more return on investment than Proact IT. However, Skandinaviska Enskilda Banken is 1.55 times less risky than Proact IT. It trades about 0.16 of its potential returns per unit of risk. Proact IT Group is currently generating about -0.11 per unit of risk. If you would invest  15,380  in Skandinaviska Enskilda Banken on April 20, 2025 and sell it today you would earn a total of  1,700  from holding Skandinaviska Enskilda Banken or generate 11.05% return on investment over 90 days.

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

Skandinaviska Enskilda Banken  vs.  Proact IT Group

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 uncertain basic indicators, Skandinaviska Enskilda may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Proact IT Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proact IT Group 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 Proact IT

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

The idea behind Skandinaviska Enskilda Banken and Proact IT Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.