Correlation Between Postal Savings and Sydbank A/S
Can any of the company-specific risk be diversified away by investing in both Postal Savings 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 Postal Savings 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 Postal Savings Bank and Sydbank AS, you can compare the effects of market volatilities on Postal Savings 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 Postal Savings with a short position of Sydbank A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Sydbank A/S.
Diversification Opportunities for Postal Savings and Sydbank A/S
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Postal and Sydbank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank A/S and Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and Sydbank A/S go up and down completely randomly.
Pair Corralation between Postal Savings and Sydbank A/S
Assuming the 90 days horizon Postal Savings Bank is expected to generate 2.6 times more return on investment than Sydbank A/S. However, Postal Savings is 2.6 times more volatile than Sydbank AS. It trades about 0.13 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.11 per unit of risk. If you would invest 39.00 in Postal Savings Bank on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Postal Savings Bank or generate 41.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Sydbank AS
Performance |
| Timeline |
| Postal Savings Bank |
| Sydbank A/S |
Postal Savings and Sydbank A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Sydbank A/S
The main advantage of trading using opposite Postal Savings and Sydbank A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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.| Postal Savings vs. Austevoll Seafood ASA | Postal Savings vs. MTY Food Group | Postal Savings vs. Virtu Financial | Postal Savings vs. MOLSON RS BEVERAGE |
| Sydbank A/S vs. POSBO UNSPADRS20YC1 | Sydbank A/S vs. Postal Savings Bank | Sydbank A/S vs. Truist Financial | Sydbank A/S vs. OVERSEA CHINUNSPADR2 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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