Correlation Between Scandinavian Enviro and SenzaGen

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

By analyzing existing cross correlation between Scandinavian Enviro Systems and SenzaGen AB, you can compare the effects of market volatilities on Scandinavian Enviro and SenzaGen 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 Scandinavian Enviro with a short position of SenzaGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Enviro and SenzaGen.

Diversification Opportunities for Scandinavian Enviro and SenzaGen

-0.44

Correlation Coefficient

Scandinavian Enviro  SenzaGen

Very good diversification

The 3 months correlation between Scandinavian and SenzaGen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Enviro Systems and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen AB and Scandinavian Enviro 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 Scandinavian Enviro Systems are associated (or correlated) with SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of Scandinavian Enviro i.e., Scandinavian Enviro and SenzaGen go up and down completely randomly.

Pair Corralation between Scandinavian Enviro and SenzaGen

Assuming the 90 days trading horizon Scandinavian Enviro Systems is expected to under-perform the SenzaGen. But the stock apears to be less risky and, when comparing its historical volatility, Scandinavian Enviro Systems is 1.41 times less risky than SenzaGen. The stock trades about -0.01 of its potential returns per unit of risk. The SenzaGen AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  496.00  in SenzaGen AB on April 23, 2025 and sell it today you would earn a total of  44.00  from holding SenzaGen AB or generate 8.87% return on investment over 90 days.

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

Scandinavian Enviro Systems  vs.  SenzaGen AB

Scandinavian Enviro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scandinavian Enviro Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Scandinavian Enviro is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

SenzaGen AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SenzaGen AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SenzaGen unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scandinavian Enviro and SenzaGen

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

The idea behind Scandinavian Enviro Systems and SenzaGen 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.