Correlation Between Synsam AB and Getinge AB
Can any of the company-specific risk be diversified away by investing in both Synsam AB and Getinge 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 Synsam AB and Getinge AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synsam AB and Getinge AB ser, you can compare the effects of market volatilities on Synsam AB and Getinge 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 Synsam AB with a short position of Getinge AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synsam AB and Getinge AB.
Diversification Opportunities for Synsam AB and Getinge AB
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synsam and Getinge is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Synsam AB and Getinge AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getinge AB ser and Synsam 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 Synsam AB are associated (or correlated) with Getinge AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getinge AB ser has no effect on the direction of Synsam AB i.e., Synsam AB and Getinge AB go up and down completely randomly.
Pair Corralation between Synsam AB and Getinge AB
Assuming the 90 days trading horizon Synsam AB is expected to generate 1.03 times more return on investment than Getinge AB. However, Synsam AB is 1.03 times more volatile than Getinge AB ser. It trades about 0.01 of its potential returns per unit of risk. Getinge AB ser is currently generating about -0.04 per unit of risk. If you would invest 4,380 in Synsam AB on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Synsam AB or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synsam AB vs. Getinge AB ser
Performance |
| Timeline |
| Synsam AB |
| Getinge AB ser |
Synsam AB and Getinge AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synsam AB and Getinge AB
The main advantage of trading using opposite Synsam AB and Getinge AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synsam AB position performs unexpectedly, Getinge 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 Getinge AB will offset losses from the drop in Getinge AB's long position.The idea behind Synsam AB and Getinge AB ser pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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