Correlation Between Global Net and Sydbank

Can any of the company-specific risk be diversified away by investing in both Global Net and Sydbank 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 Global Net and Sydbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Net Lease and Sydbank, you can compare the effects of market volatilities on Global Net and Sydbank 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 Global Net with a short position of Sydbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Sydbank.

Diversification Opportunities for Global Net and Sydbank

-0.65

Correlation Coefficient

Global Net  Sydbank

Excellent diversification

The 3 months correlation between Global and Sydbank is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank and Global Net 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 Global Net Lease are associated (or correlated) with Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Global Net i.e., Global Net and Sydbank go up and down completely randomly.

Pair Corralation between Global Net and Sydbank

Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Sydbank. In addition to that, Global Net is 1.07 times more volatile than Sydbank. It trades about -0.05 of its total potential returns per unit of risk. Sydbank is currently generating about 0.12 per unit of volatility. If you would invest  33,250  in Sydbank on October 25, 2024 and sell it today you would earn a total of  4,670  from holding Sydbank or generate 14.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Global Net Lease  vs.  Sydbank

Global Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Sydbank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sydbank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Net and Sydbank

The main advantage of trading using opposite Global Net and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Sydbank 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 Sydbank will offset losses from the drop in Sydbank's long position.

The idea behind Global Net Lease and Sydbank 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.