Correlation Between Sydbank and MG Plc
Can any of the company-specific risk be diversified away by investing in both Sydbank and MG Plc 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 MG Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and MG Plc, you can compare the effects of market volatilities on Sydbank and MG Plc 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 MG Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and MG Plc.
Diversification Opportunities for Sydbank and MG Plc
Very good diversification
The 3 months correlation between Sydbank and MNG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank and MG Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG 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 MG Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Plc has no effect on the direction of Sydbank i.e., Sydbank and MG Plc go up and down completely randomly.
Pair Corralation between Sydbank and MG Plc
Assuming the 90 days trading horizon Sydbank is expected to generate 107.0 times less return on investment than MG Plc. In addition to that, Sydbank is 1.29 times more volatile than MG Plc. It trades about 0.0 of its total potential returns per unit of risk. MG Plc is currently generating about 0.02 per unit of volatility. If you would invest 19,437 in MG Plc on September 2, 2024 and sell it today you would earn a total of 383.00 from holding MG Plc or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank vs. MG Plc
Performance |
| Timeline |
| Sydbank |
| MG Plc |
Sydbank and MG Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and MG Plc
The main advantage of trading using opposite Sydbank and MG Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank position performs unexpectedly, MG Plc 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 MG Plc will offset losses from the drop in MG Plc's long position.| Sydbank vs. Uniper SE | Sydbank vs. Mulberry Group PLC | Sydbank vs. London Security Plc | Sydbank vs. Triad Group PLC |
| MG Plc vs. Air Products Chemicals | MG Plc vs. Wizz Air Holdings | MG Plc vs. Made Tech Group | MG Plc vs. L3Harris Technologies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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