Correlation Between Leroy Seafood and Sydbank
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and Sydbank 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 Leroy Seafood and Sydbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and Sydbank, you can compare the effects of market volatilities on Leroy Seafood and Sydbank 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 Leroy Seafood with a short position of Sydbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Sydbank.
Diversification Opportunities for Leroy Seafood and Sydbank
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leroy and Sydbank is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank and Leroy Seafood 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 Leroy Seafood Group are associated (or correlated) with Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and Sydbank go up and down completely randomly.
Pair Corralation between Leroy Seafood and Sydbank
Assuming the 90 days trading horizon Leroy Seafood Group is expected to under-perform the Sydbank. But the stock apears to be less risky and, when comparing its historical volatility, Leroy Seafood Group is 1.63 times less risky than Sydbank. The stock trades about -0.13 of its potential returns per unit of risk. The Sydbank is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 37,260 in Sydbank on October 11, 2024 and sell it today you would lose (350.00) from holding Sydbank or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leroy Seafood Group vs. Sydbank
Performance |
| Timeline |
| Leroy Seafood Group |
| Sydbank |
Leroy Seafood and Sydbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and Sydbank
The main advantage of trading using opposite Leroy Seafood and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, Sydbank 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 Sydbank will offset losses from the drop in Sydbank's long position.| Leroy Seafood vs. Raymond James Financial | Leroy Seafood vs. Metro Bank PLC | Leroy Seafood vs. Bankers Investment Trust | Leroy Seafood vs. Costco Wholesale Corp |
| Sydbank vs. CAP LEASE AVIATION | Sydbank vs. Sligro Food Group | Sydbank vs. Leroy Seafood Group | Sydbank vs. Roebuck Food Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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