Correlation Between Lendinvest PLC and Sydbank
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Sydbank 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 Lendinvest PLC and Sydbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Sydbank, you can compare the effects of market volatilities on Lendinvest PLC and Sydbank 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 Lendinvest PLC with a short position of Sydbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Sydbank.
Diversification Opportunities for Lendinvest PLC and Sydbank
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lendinvest and Sydbank is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank and Lendinvest 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 Lendinvest PLC are associated (or correlated) with Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Sydbank go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Sydbank
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 3.58 times less return on investment than Sydbank. But when comparing it to its historical volatility, Lendinvest PLC is 1.1 times less risky than Sydbank. It trades about 0.08 of its potential returns per unit of risk. Sydbank is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 32,580 in Sydbank on September 1, 2024 and sell it today you would earn a total of 2,400 from holding Sydbank or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Sydbank
Performance |
| Timeline |
| Lendinvest PLC |
| Sydbank |
Lendinvest PLC and Sydbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Sydbank
The main advantage of trading using opposite Lendinvest PLC and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Sydbank 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 will offset losses from the drop in Sydbank's long position.| Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Reliance Industries Ltd |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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