Correlation Between Sinch AB and COOR Service
Can any of the company-specific risk be diversified away by investing in both Sinch AB and COOR Service 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 Sinch AB and COOR Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinch AB and COOR Service Management, you can compare the effects of market volatilities on Sinch AB and COOR Service 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 Sinch AB with a short position of COOR Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and COOR Service.
Diversification Opportunities for Sinch AB and COOR Service
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinch and COOR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and COOR Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COOR Service Management and Sinch AB 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 Sinch AB are associated (or correlated) with COOR Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COOR Service Management has no effect on the direction of Sinch AB i.e., Sinch AB and COOR Service go up and down completely randomly.
Pair Corralation between Sinch AB and COOR Service
Assuming the 90 days trading horizon Sinch AB is expected to generate 1.96 times more return on investment than COOR Service. However, Sinch AB is 1.96 times more volatile than COOR Service Management. It trades about -0.01 of its potential returns per unit of risk. COOR Service Management is currently generating about -0.04 per unit of risk. If you would invest 4,205 in Sinch AB on September 24, 2024 and sell it today you would lose (2,199) from holding Sinch AB or give up 52.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sinch AB vs. COOR Service Management
Performance |
Timeline |
Sinch AB |
COOR Service Management |
Sinch AB and COOR Service Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinch AB and COOR Service
The main advantage of trading using opposite Sinch AB and COOR Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, COOR Service 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 COOR Service will offset losses from the drop in COOR Service's long position.Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group AB |
COOR Service vs. Samhllsbyggnadsbolaget i Norden | COOR Service vs. Sinch AB | COOR Service vs. Evolution AB | COOR Service vs. NIBE Industrier AB |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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