Correlation Between Cessatech and Sydbank AS

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

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

Diversification Opportunities for Cessatech and Sydbank AS

-0.8

Correlation Coefficient

Cessatech  Sydbank AS

Pay attention - limited upside

The 3 months correlation between Cessatech and Sydbank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cessatech AS and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and Cessatech 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 Cessatech AS are associated (or correlated) with Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of Cessatech i.e., Cessatech and Sydbank AS go up and down completely randomly.

Pair Corralation between Cessatech and Sydbank AS

Assuming the 90 days trading horizon Cessatech AS is expected to under-perform the Sydbank AS. In addition to that, Cessatech is 2.55 times more volatile than Sydbank AS. It trades about -0.09 of its total potential returns per unit of risk. Sydbank AS is currently generating about 0.22 per unit of volatility. If you would invest  35,917  in Sydbank AS on December 25, 2024 and sell it today you would earn a total of  7,743  from holding Sydbank AS or generate 21.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Cessatech AS  vs.  Sydbank AS

Cessatech AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cessatech AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sydbank AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sydbank AS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cessatech and Sydbank AS

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

The idea behind Cessatech AS 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.