Correlation Between Sinch AB and Nobia AB
Can any of the company-specific risk be diversified away by investing in both Sinch AB and Nobia 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 Nobia 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 Nobia AB, you can compare the effects of market volatilities on Sinch AB and Nobia 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 Nobia AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and Nobia AB.
Diversification Opportunities for Sinch AB and Nobia AB
Very poor diversification
The 3 months correlation between Sinch and Nobia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and Nobia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobia 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 Nobia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobia AB has no effect on the direction of Sinch AB i.e., Sinch AB and Nobia AB go up and down completely randomly.
Pair Corralation between Sinch AB and Nobia AB
Assuming the 90 days trading horizon Sinch AB is expected to generate 0.82 times more return on investment than Nobia AB. However, Sinch AB is 1.22 times less risky than Nobia AB. It trades about 0.03 of its potential returns per unit of risk. Nobia AB is currently generating about -0.03 per unit of risk. If you would invest 1,873 in Sinch AB on September 1, 2024 and sell it today you would earn a total of 122.00 from holding Sinch AB or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Sinch AB vs. Nobia AB
Performance |
| Timeline |
| Sinch AB |
| Nobia AB |
Sinch AB and Nobia AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and Nobia AB
The main advantage of trading using opposite Sinch AB and Nobia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, Nobia 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 Nobia AB will offset losses from the drop in Nobia AB's long position.| Sinch AB vs. Checkin Group AB | Sinch AB vs. Midsummer AB | Sinch AB vs. Hexatronic Group AB | Sinch AB vs. Cint Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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