Correlation Between Sydbank and Overstock
Can any of the company-specific risk be diversified away by investing in both Sydbank and Overstock 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 Sydbank and Overstock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and Overstock, you can compare the effects of market volatilities on Sydbank and Overstock 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 Sydbank with a short position of Overstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and Overstock.
Diversification Opportunities for Sydbank and Overstock
Excellent diversification
The 3 months correlation between Sydbank and Overstock is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank and Overstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstock and Sydbank 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 Sydbank are associated (or correlated) with Overstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstock has no effect on the direction of Sydbank i.e., Sydbank and Overstock go up and down completely randomly.
Pair Corralation between Sydbank and Overstock
Assuming the 90 days trading horizon Sydbank is expected to generate 0.24 times more return on investment than Overstock. However, Sydbank is 4.17 times less risky than Overstock. It trades about 0.22 of its potential returns per unit of risk. Overstock is currently generating about -0.2 per unit of risk. If you would invest 32,900 in Sydbank on September 13, 2024 and sell it today you would earn a total of 4,660 from holding Sydbank or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank vs. Overstock
Performance |
| Timeline |
| Sydbank |
| Overstock |
Sydbank and Overstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and Overstock
The main advantage of trading using opposite Sydbank and Overstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank position performs unexpectedly, Overstock 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 Overstock will offset losses from the drop in Overstock's long position.| Sydbank vs. Fair Oaks Income | Sydbank vs. Tatton Asset Management | Sydbank vs. Delta Air Lines | Sydbank vs. Endeavour Mining Corp |
| Overstock vs. Waste Management | Overstock vs. JD Sports Fashion | Overstock vs. Blackstone Loan Financing | Overstock vs. EVS Broadcast Equipment |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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