Correlation Between Formuepleje Mix and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both Formuepleje Mix 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 Formuepleje Mix and Sydbank AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formuepleje Mix Medium and Sydbank AS, you can compare the effects of market volatilities on Formuepleje Mix 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 Formuepleje Mix with a short position of Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formuepleje Mix and Sydbank AS.
Diversification Opportunities for Formuepleje Mix and Sydbank AS
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Formuepleje and Sydbank is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Formuepleje Mix Medium and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and Formuepleje Mix 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 Formuepleje Mix Medium 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 Formuepleje Mix i.e., Formuepleje Mix and Sydbank AS go up and down completely randomly.
Pair Corralation between Formuepleje Mix and Sydbank AS
Assuming the 90 days trading horizon Formuepleje Mix is expected to generate 2.2 times less return on investment than Sydbank AS. But when comparing it to its historical volatility, Formuepleje Mix Medium is 1.67 times less risky than Sydbank AS. It trades about 0.22 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 32,600 in Sydbank AS on September 1, 2024 and sell it today you would earn a total of 2,460 from holding Sydbank AS or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Formuepleje Mix Medium vs. Sydbank AS
Performance |
| Timeline |
| Formuepleje Mix Medium |
| Sydbank AS |
Formuepleje Mix and Sydbank AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formuepleje Mix and Sydbank AS
The main advantage of trading using opposite Formuepleje Mix and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formuepleje Mix 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.| Formuepleje Mix vs. Novo Nordisk AS | Formuepleje Mix vs. Nordea Bank Abp | Formuepleje Mix vs. DSV Panalpina AS | Formuepleje Mix vs. AP Mller |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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