Correlation Between KAUFMAN ET and Sydbank A/S

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

By analyzing existing cross correlation between KAUFMAN ET BROAD and Sydbank AS, you can compare the effects of market volatilities on KAUFMAN ET and Sydbank A/S 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 KAUFMAN ET with a short position of Sydbank A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Sydbank A/S.

Diversification Opportunities for KAUFMAN ET and Sydbank A/S

-0.69

Correlation Coefficient

KAUFMAN ET  Sydbank A/S

Excellent diversification

The 3 months correlation between KAUFMAN and Sydbank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank A/S and KAUFMAN ET 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 KAUFMAN ET BROAD are associated (or correlated) with Sydbank A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank A/S has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and Sydbank A/S go up and down completely randomly.

Pair Corralation between KAUFMAN ET and Sydbank A/S

Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the Sydbank A/S. In addition to that, KAUFMAN ET is 1.11 times more volatile than Sydbank AS. It trades about -0.05 of its total potential returns per unit of risk. Sydbank AS is currently generating about 0.2 per unit of volatility. If you would invest  4,794  in Sydbank AS on October 22, 2024 and sell it today you would earn a total of  241.00  from holding Sydbank AS or generate 5.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

KAUFMAN ET BROAD  vs.  Sydbank AS

KAUFMAN ET BROAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KAUFMAN ET BROAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Sydbank A/S

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sydbank A/S reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KAUFMAN ET and Sydbank A/S

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

The idea behind KAUFMAN ET BROAD and Sydbank AS 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.