Correlation Between ISS AS and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both ISS AS 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 ISS AS and Sydbank AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISS AS and Sydbank AS, you can compare the effects of market volatilities on ISS AS 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 ISS AS with a short position of Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISS AS and Sydbank AS.
Diversification Opportunities for ISS AS and Sydbank AS
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ISS and Sydbank is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ISS AS and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and ISS 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 ISS 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 ISS AS i.e., ISS AS and Sydbank AS go up and down completely randomly.
Pair Corralation between ISS AS and Sydbank AS
Assuming the 90 days trading horizon ISS AS is expected to generate 10.14 times less return on investment than Sydbank AS. But when comparing it to its historical volatility, ISS AS is 1.07 times less risky than Sydbank AS. It trades about 0.01 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 33,220 in Sydbank AS on September 6, 2024 and sell it today you would earn a total of 2,520 from holding Sydbank AS or generate 7.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
ISS AS vs. Sydbank AS
Performance |
Timeline |
ISS AS |
Sydbank AS |
ISS AS and Sydbank AS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ISS AS and Sydbank AS
The main advantage of trading using opposite ISS AS and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISS AS 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 ISS 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.Sydbank AS vs. Jyske Bank AS | Sydbank AS vs. Tryg AS | Sydbank AS vs. FLSmidth Co | Sydbank AS vs. Nordea Bank Abp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |