Correlation Between Sydbank and GoldMining
Can any of the company-specific risk be diversified away by investing in both Sydbank and GoldMining 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 GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and GoldMining, you can compare the effects of market volatilities on Sydbank and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and GoldMining.
Diversification Opportunities for Sydbank and GoldMining
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sydbank and GoldMining is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Sydbank i.e., Sydbank and GoldMining go up and down completely randomly.
Pair Corralation between Sydbank and GoldMining
Assuming the 90 days trading horizon Sydbank is expected to generate 0.4 times more return on investment than GoldMining. However, Sydbank is 2.51 times less risky than GoldMining. It trades about 0.27 of its potential returns per unit of risk. GoldMining is currently generating about -0.05 per unit of risk. If you would invest 32,580 in Sydbank on September 1, 2024 and sell it today you would earn a total of 2,400 from holding Sydbank or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Sydbank vs. GoldMining
Performance |
| Timeline |
| Sydbank |
| GoldMining |
Sydbank and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and GoldMining
The main advantage of trading using opposite Sydbank and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Sydbank vs. Supermarket Income REIT | Sydbank vs. Waste Management | Sydbank vs. Hochschild Mining plc | Sydbank vs. Coor Service Management |
| GoldMining vs. Greenroc Mining PLC | GoldMining vs. Silvercorp Metals | GoldMining vs. Sydbank | GoldMining vs. AMG Advanced Metallurgical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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