Correlation Between NAKED WINES and Sydbank AS

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

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

Diversification Opportunities for NAKED WINES and Sydbank AS

-0.7

Correlation Coefficient

NAKED WINES  Sydbank AS

Excellent diversification

The 3 months correlation between NAKED and Sydbank is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and Sydbank AS go up and down completely randomly.

Pair Corralation between NAKED WINES and Sydbank AS

Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Sydbank AS. In addition to that, NAKED WINES is 1.69 times more volatile than Sydbank AS. It trades about -0.1 of its total potential returns per unit of risk. Sydbank AS is currently generating about 0.14 per unit of volatility. If you would invest  4,596  in Sydbank AS on October 7, 2024 and sell it today you would earn a total of  469.00  from holding Sydbank AS or generate 10.2% return on investment over 90 days.

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

NAKED WINES PLC  vs.  Sydbank AS

NAKED WINES PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAKED WINES PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sydbank AS

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with NAKED WINES and Sydbank AS

The main advantage of trading using opposite NAKED WINES and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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 NAKED WINES PLC 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.