Correlation Between Sydbank AS and ChemoMetec
Can any of the company-specific risk be diversified away by investing in both Sydbank AS and ChemoMetec 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 Sydbank AS and ChemoMetec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank AS and ChemoMetec AS, you can compare the effects of market volatilities on Sydbank AS and ChemoMetec 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 Sydbank AS with a short position of ChemoMetec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank AS and ChemoMetec.
Diversification Opportunities for Sydbank AS and ChemoMetec
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sydbank and ChemoMetec is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank AS and ChemoMetec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChemoMetec AS and Sydbank 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 Sydbank AS are associated (or correlated) with ChemoMetec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChemoMetec AS has no effect on the direction of Sydbank AS i.e., Sydbank AS and ChemoMetec go up and down completely randomly.
Pair Corralation between Sydbank AS and ChemoMetec
Assuming the 90 days trading horizon Sydbank AS is expected to generate 1.68 times less return on investment than ChemoMetec. But when comparing it to its historical volatility, Sydbank AS is 2.54 times less risky than ChemoMetec. It trades about 0.13 of its potential returns per unit of risk. ChemoMetec AS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 39,460 in ChemoMetec AS on November 1, 2024 and sell it today you would earn a total of 10,590 from holding ChemoMetec AS or generate 26.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank AS vs. ChemoMetec AS
Performance |
| Timeline |
| Sydbank AS |
| ChemoMetec AS |
Sydbank AS and ChemoMetec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank AS and ChemoMetec
The main advantage of trading using opposite Sydbank AS and ChemoMetec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank AS position performs unexpectedly, ChemoMetec 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 ChemoMetec will offset losses from the drop in ChemoMetec's long position.| Sydbank AS vs. Jyske Bank AS | Sydbank AS vs. Tryg AS | Sydbank AS vs. FLSmidth Co | Sydbank AS vs. Nordea Bank Abp |
| ChemoMetec vs. cBrain AS | ChemoMetec vs. Ambu AS | ChemoMetec vs. Genmab AS | ChemoMetec vs. Zealand Pharma AS |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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