Correlation Between Sydbank and Induction Healthcare
Can any of the company-specific risk be diversified away by investing in both Sydbank and Induction Healthcare 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 Induction Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and Induction Healthcare Group, you can compare the effects of market volatilities on Sydbank and Induction Healthcare 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 Induction Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and Induction Healthcare.
Diversification Opportunities for Sydbank and Induction Healthcare
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sydbank and Induction is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction Healthcare 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 Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Sydbank i.e., Sydbank and Induction Healthcare go up and down completely randomly.
Pair Corralation between Sydbank and Induction Healthcare
Assuming the 90 days trading horizon Sydbank is expected to generate 0.48 times more return on investment than Induction Healthcare. However, Sydbank is 2.06 times less risky than Induction Healthcare. It trades about 0.57 of its potential returns per unit of risk. Induction Healthcare Group is currently generating about -0.32 per unit of risk. If you would invest 37,330 in Sydbank on November 29, 2024 and sell it today you would earn a total of 7,700 from holding Sydbank or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank vs. Induction Healthcare Group
Performance |
| Timeline |
| Sydbank |
| Induction Healthcare |
Sydbank and Induction Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and Induction Healthcare
The main advantage of trading using opposite Sydbank and Induction Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank position performs unexpectedly, Induction Healthcare 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 Induction Healthcare will offset losses from the drop in Induction Healthcare's long position.| Sydbank vs. Martin Marietta Materials | Sydbank vs. Centaur Media | Sydbank vs. JD Sports Fashion | Sydbank vs. Zinc Media Group |
| Induction Healthcare vs. CNH Industrial NV | Induction Healthcare vs. Wheaton Precious Metals | Induction Healthcare vs. Team Internet Group | Induction Healthcare vs. Zoom Video 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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