Correlation Between Eolus Vind and Sinch AB
Can any of the company-specific risk be diversified away by investing in both Eolus Vind and Sinch AB 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 Eolus Vind and Sinch AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eolus Vind AB and Sinch AB, you can compare the effects of market volatilities on Eolus Vind and Sinch AB 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 Eolus Vind with a short position of Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eolus Vind and Sinch AB.
Diversification Opportunities for Eolus Vind and Sinch AB
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eolus and Sinch is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind AB and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch AB and Eolus Vind 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 Eolus Vind AB are associated (or correlated) with Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of Eolus Vind i.e., Eolus Vind and Sinch AB go up and down completely randomly.
Pair Corralation between Eolus Vind and Sinch AB
Assuming the 90 days trading horizon Eolus Vind AB is expected to under-perform the Sinch AB. But the stock apears to be less risky and, when comparing its historical volatility, Eolus Vind AB is 1.77 times less risky than Sinch AB. The stock trades about -0.11 of its potential returns per unit of risk. The Sinch AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 3,751 in Sinch AB on August 25, 2024 and sell it today you would lose (1,788) from holding Sinch AB or give up 47.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eolus Vind AB vs. Sinch AB
Performance |
| Timeline |
| Eolus Vind AB |
| Sinch AB |
Eolus Vind and Sinch AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eolus Vind and Sinch AB
The main advantage of trading using opposite Eolus Vind and Sinch AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eolus Vind position performs unexpectedly, Sinch AB 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 Sinch AB will offset losses from the drop in Sinch AB's long position.| Eolus Vind vs. Lifco AB | Eolus Vind vs. Sdiptech AB | Eolus Vind vs. Vitec Software Group | Eolus Vind vs. Addtech AB |
| Sinch AB vs. Lidds AB | Sinch AB vs. Serstech AB | Sinch AB vs. Transtema Group AB | Sinch AB vs. Enorama Pharma AB |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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