Correlation Between Sinch AB and Paradox Interactive
Can any of the company-specific risk be diversified away by investing in both Sinch AB and Paradox Interactive 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 Paradox Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinch AB and Paradox Interactive AB, you can compare the effects of market volatilities on Sinch AB and Paradox Interactive 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 Paradox Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and Paradox Interactive.
Diversification Opportunities for Sinch AB and Paradox Interactive
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinch and Paradox is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and Paradox Interactive AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradox Interactive 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 Paradox Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradox Interactive has no effect on the direction of Sinch AB i.e., Sinch AB and Paradox Interactive go up and down completely randomly.
Pair Corralation between Sinch AB and Paradox Interactive
Assuming the 90 days trading horizon Sinch AB is expected to under-perform the Paradox Interactive. In addition to that, Sinch AB is 1.71 times more volatile than Paradox Interactive AB. It trades about -0.01 of its total potential returns per unit of risk. Paradox Interactive AB is currently generating about 0.08 per unit of volatility. If you would invest 14,940 in Paradox Interactive AB on August 31, 2024 and sell it today you would earn a total of 3,640 from holding Paradox Interactive AB or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinch AB vs. Paradox Interactive AB
Performance |
| Timeline |
| Sinch AB |
| Paradox Interactive |
Sinch AB and Paradox Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and Paradox Interactive
The main advantage of trading using opposite Sinch AB and Paradox Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, Paradox Interactive 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 Paradox Interactive will offset losses from the drop in Paradox Interactive's long position.| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group AB |
| Paradox Interactive vs. Stillfront Group AB | Paradox Interactive vs. Embracer Group AB | Paradox Interactive vs. G5 Entertainment publ | Paradox Interactive vs. Evolution 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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