Correlation Between Sydbank and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Sydbank and Gamma Communications 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 Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and Gamma Communications PLC, you can compare the effects of market volatilities on Sydbank and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and Gamma Communications.
Diversification Opportunities for Sydbank and Gamma Communications
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sydbank and Gamma is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of Sydbank i.e., Sydbank and Gamma Communications go up and down completely randomly.
Pair Corralation between Sydbank and Gamma Communications
Assuming the 90 days trading horizon Sydbank is expected to generate 2.04 times more return on investment than Gamma Communications. However, Sydbank is 2.04 times more volatile than Gamma Communications PLC. It trades about 0.18 of its potential returns per unit of risk. Gamma Communications PLC is currently generating about -0.41 per unit of risk. If you would invest 36,080 in Sydbank on October 10, 2024 and sell it today you would earn a total of 2,800 from holding Sydbank or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank vs. Gamma Communications PLC
Performance |
| Timeline |
| Sydbank |
| Gamma Communications PLC |
Sydbank and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and Gamma Communications
The main advantage of trading using opposite Sydbank and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Sydbank vs. Mineral Financial Investments | Sydbank vs. Cardinal Health | Sydbank vs. Edinburgh Investment Trust | Sydbank vs. HCA Healthcare |
| Gamma Communications vs. Team Internet Group | Gamma Communications vs. British American Tobacco | Gamma Communications vs. Spirent Communications plc | Gamma Communications vs. Batm Advanced Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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