Correlation Between TRAINLINE PLC and Sydbank A/S
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and Sydbank A/S 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 TRAINLINE PLC and Sydbank A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and Sydbank AS, you can compare the effects of market volatilities on TRAINLINE PLC and Sydbank A/S 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 TRAINLINE PLC with a short position of Sydbank A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Sydbank A/S.
Diversification Opportunities for TRAINLINE PLC and Sydbank A/S
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TRAINLINE and Sydbank is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank A/S and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Sydbank A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank A/S has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Sydbank A/S go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and Sydbank A/S
Assuming the 90 days trading horizon TRAINLINE PLC is expected to generate 4.28 times less return on investment than Sydbank A/S. But when comparing it to its historical volatility, TRAINLINE PLC LS is 2.22 times less risky than Sydbank A/S. It trades about 0.04 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,083 in Sydbank AS on October 13, 2024 and sell it today you would earn a total of 3,833 from holding Sydbank AS or generate 353.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. Sydbank AS
Performance |
| Timeline |
| TRAINLINE PLC LS |
| Sydbank A/S |
TRAINLINE PLC and Sydbank A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and Sydbank A/S
The main advantage of trading using opposite TRAINLINE PLC and Sydbank A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, Sydbank A/S 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 Sydbank A/S will offset losses from the drop in Sydbank A/S's long position.| TRAINLINE PLC vs. Guangdong Investment Limited | TRAINLINE PLC vs. Apollo Investment Corp | TRAINLINE PLC vs. NXP Semiconductors NV | TRAINLINE PLC vs. MEDCAW INVESTMENTS LS 01 |
| Sydbank A/S vs. EVS Broadcast Equipment | Sydbank A/S vs. Broadridge Financial Solutions | Sydbank A/S vs. 24SEVENOFFICE GROUP AB | Sydbank A/S vs. TRAINLINE PLC LS |
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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