Correlation Between Skandinaviska Enskilda and Afentra PLC

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

Diversification Opportunities for Skandinaviska Enskilda and Afentra PLC

0.47

Correlation Coefficient

Skandinaviska Enskilda  Afentra PLC

Very weak diversification

The 3 months correlation between Skandinaviska and Afentra is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Afentra PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afentra 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 Afentra PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afentra PLC has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Afentra PLC go up and down completely randomly.

Pair Corralation between Skandinaviska Enskilda and Afentra PLC

Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 3.47 times less return on investment than Afentra PLC. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 2.52 times less risky than Afentra PLC. It trades about 0.1 of its potential returns per unit of risk. Afentra PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Afentra PLC on April 16, 2025 and sell it today you would earn a total of  13.00  from holding Afentra PLC or generate 31.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Skandinaviska Enskilda Banken  vs.  Afentra PLC

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 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Skandinaviska Enskilda may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Afentra PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Afentra PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Afentra PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Skandinaviska Enskilda and Afentra PLC

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

The idea behind Skandinaviska Enskilda Banken and Afentra PLC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.