Correlation Between ALK Abell and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both ALK Abell and Sydbank AS 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 ALK Abell and Sydbank AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALK Abell AS and Sydbank AS, you can compare the effects of market volatilities on ALK Abell and Sydbank AS 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 ALK Abell with a short position of Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALK Abell and Sydbank AS.
Diversification Opportunities for ALK Abell and Sydbank AS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ALK and Sydbank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ALK Abell AS and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and ALK Abell 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 ALK Abell AS are associated (or correlated) with Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of ALK Abell i.e., ALK Abell and Sydbank AS go up and down completely randomly.
Pair Corralation between ALK Abell and Sydbank AS
Assuming the 90 days trading horizon ALK Abell AS is expected to generate 1.59 times more return on investment than Sydbank AS. However, ALK Abell is 1.59 times more volatile than Sydbank AS. It trades about 0.05 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.05 per unit of risk. If you would invest 10,150 in ALK Abell AS on September 19, 2024 and sell it today you would earn a total of 5,150 from holding ALK Abell AS or generate 50.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALK Abell AS vs. Sydbank AS
Performance |
| Timeline |
| ALK Abell AS |
| Sydbank AS |
ALK Abell and Sydbank AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALK Abell and Sydbank AS
The main advantage of trading using opposite ALK Abell and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALK Abell position performs unexpectedly, Sydbank AS 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 AS will offset losses from the drop in Sydbank AS's long position.| ALK Abell vs. Ambu AS | ALK Abell vs. DSV Panalpina AS | ALK Abell vs. Bavarian Nordic | ALK Abell vs. GN Store Nord |
| Sydbank AS vs. Jyske Bank AS | Sydbank AS vs. Tryg AS | Sydbank AS vs. FLSmidth Co | Sydbank AS vs. Nordea Bank Abp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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