Correlation Between Mineral Financial and Sydbank

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

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

Diversification Opportunities for Mineral Financial and Sydbank

0.48

Correlation Coefficient

Mineral Financial  Sydbank

Very weak diversification

The 3 months correlation between Mineral and Sydbank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Financial Investments and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank and Mineral Financial 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 Mineral Financial Investments 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 Mineral Financial i.e., Mineral Financial and Sydbank go up and down completely randomly.

Pair Corralation between Mineral Financial and Sydbank

Assuming the 90 days trading horizon Mineral Financial is expected to generate 1.16 times less return on investment than Sydbank. In addition to that, Mineral Financial is 1.29 times more volatile than Sydbank. It trades about 0.12 of its total potential returns per unit of risk. Sydbank is currently generating about 0.18 per unit of volatility. If you would invest  36,080  in Sydbank on October 10, 2024 and sell it today you would earn a total of  2,800  from holding Sydbank or generate 7.76% return on investment over 90 days.

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

Mineral Financial Investments  vs.  Sydbank

Mineral Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Financial Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mineral Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sydbank

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sydbank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mineral Financial and Sydbank

The main advantage of trading using opposite Mineral Financial and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Financial 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 Mineral Financial Investments 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.