Correlation Between Matas AS and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both Matas AS 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 Matas AS and Sydbank AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matas AS and Sydbank AS, you can compare the effects of market volatilities on Matas AS 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 Matas AS with a short position of Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and Sydbank AS.
Diversification Opportunities for Matas AS and Sydbank AS
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matas and Sydbank is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and Matas AS 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 Matas 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 Matas AS i.e., Matas AS and Sydbank AS go up and down completely randomly.
Pair Corralation between Matas AS and Sydbank AS
Assuming the 90 days trading horizon Matas AS is expected to generate 1.07 times more return on investment than Sydbank AS. However, Matas AS is 1.07 times more volatile than Sydbank AS. It trades about 0.01 of its potential returns per unit of risk. Sydbank AS is currently generating about -0.01 per unit of risk. If you would invest 12,360 in Matas AS on August 25, 2024 and sell it today you would lose (60.00) from holding Matas AS or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matas AS vs. Sydbank AS
Performance |
| Timeline |
| Matas AS |
| Sydbank AS |
Matas AS and Sydbank AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matas AS and Sydbank AS
The main advantage of trading using opposite Matas AS and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas AS 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.The idea behind Matas AS and Sydbank AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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