Correlation Between Sydbank and Learning Technologies
Can any of the company-specific risk be diversified away by investing in both Sydbank and Learning Technologies 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 Learning Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and Learning Technologies Group, you can compare the effects of market volatilities on Sydbank and Learning Technologies 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 Learning Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and Learning Technologies.
Diversification Opportunities for Sydbank and Learning Technologies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sydbank and Learning is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank and Learning Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learning Technologies 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 Learning Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learning Technologies has no effect on the direction of Sydbank i.e., Sydbank and Learning Technologies go up and down completely randomly.
Pair Corralation between Sydbank and Learning Technologies
Assuming the 90 days trading horizon Sydbank is expected to generate 2.81 times more return on investment than Learning Technologies. However, Sydbank is 2.81 times more volatile than Learning Technologies Group. It trades about 0.11 of its potential returns per unit of risk. Learning Technologies Group is currently generating about -0.06 per unit of risk. If you would invest 36,960 in Sydbank on October 24, 2024 and sell it today you would earn a total of 1,130 from holding Sydbank or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank vs. Learning Technologies Group
Performance |
| Timeline |
| Sydbank |
| Learning Technologies |
Sydbank and Learning Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and Learning Technologies
The main advantage of trading using opposite Sydbank and Learning Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank position performs unexpectedly, Learning Technologies 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 Learning Technologies will offset losses from the drop in Learning Technologies' long position.| Sydbank vs. Gamma Communications PLC | Sydbank vs. International Consolidated Airlines | Sydbank vs. Capital Drilling | Sydbank vs. Impax Asset Management |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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