Correlation Between Sinch AB and Ctek AB
Can any of the company-specific risk be diversified away by investing in both Sinch AB and Ctek 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 Sinch AB and Ctek AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinch AB and Ctek AB, you can compare the effects of market volatilities on Sinch AB and Ctek 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 Sinch AB with a short position of Ctek AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and Ctek AB.
Diversification Opportunities for Sinch AB and Ctek AB
Very weak diversification
The 3 months correlation between Sinch and Ctek is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and Ctek AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ctek AB and Sinch AB 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 Sinch AB are associated (or correlated) with Ctek AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ctek AB has no effect on the direction of Sinch AB i.e., Sinch AB and Ctek AB go up and down completely randomly.
Pair Corralation between Sinch AB and Ctek AB
Assuming the 90 days trading horizon Sinch AB is expected to under-perform the Ctek AB. In addition to that, Sinch AB is 3.52 times more volatile than Ctek AB. It trades about -0.27 of its total potential returns per unit of risk. Ctek AB is currently generating about -0.16 per unit of volatility. If you would invest 1,726 in Ctek AB on August 29, 2024 and sell it today you would lose (114.00) from holding Ctek AB or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinch AB vs. Ctek AB
Performance |
| Timeline |
| Sinch AB |
| Ctek AB |
Sinch AB and Ctek AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and Ctek AB
The main advantage of trading using opposite Sinch AB and Ctek AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, Ctek 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 Ctek AB will offset losses from the drop in Ctek AB's long position.| Sinch AB vs. Lidds AB | Sinch AB vs. Serstech AB | Sinch AB vs. Transtema Group AB | Sinch AB vs. Enorama Pharma AB |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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