Correlation Between Sinch AB and Zignsec AB
Can any of the company-specific risk be diversified away by investing in both Sinch AB and Zignsec 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 Zignsec 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 Zignsec AB, you can compare the effects of market volatilities on Sinch AB and Zignsec 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 Zignsec AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and Zignsec AB.
Diversification Opportunities for Sinch AB and Zignsec AB
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinch and Zignsec is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and Zignsec AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zignsec 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 Zignsec AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zignsec AB has no effect on the direction of Sinch AB i.e., Sinch AB and Zignsec AB go up and down completely randomly.
Pair Corralation between Sinch AB and Zignsec AB
Assuming the 90 days trading horizon Sinch AB is expected to under-perform the Zignsec AB. But the stock apears to be less risky and, when comparing its historical volatility, Sinch AB is 2.61 times less risky than Zignsec AB. The stock trades about -0.1 of its potential returns per unit of risk. The Zignsec AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Zignsec AB on August 29, 2024 and sell it today you would earn a total of 68.00 from holding Zignsec AB or generate 97.14% 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. Zignsec AB
Performance |
| Timeline |
| Sinch AB |
| Zignsec AB |
Sinch AB and Zignsec AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and Zignsec AB
The main advantage of trading using opposite Sinch AB and Zignsec AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, Zignsec 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 Zignsec AB will offset losses from the drop in Zignsec AB'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 |
| Zignsec AB vs. Smart Eye AB | Zignsec AB vs. Embracer Group AB | Zignsec AB vs. Zwipe AS | Zignsec AB vs. Sinch 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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