Correlation Between Sysmex Corp and Coloplast A/S

Can any of the company-specific risk be diversified away by investing in both Sysmex Corp and Coloplast A/S 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 Sysmex Corp and Coloplast A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Sysmex Corp and Coloplast A/S

0.91

Correlation Coefficient

Sysmex Corp  Coloplast A/S

Almost no diversification

The 3 months correlation between Sysmex and Coloplast is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sysmex Corp and Coloplast AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A/S and Sysmex Corp 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 Sysmex Corp are associated (or correlated) with Coloplast A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast A/S has no effect on the direction of Sysmex Corp i.e., Sysmex Corp and Coloplast A/S go up and down completely randomly.

Pair Corralation between Sysmex Corp and Coloplast A/S

Assuming the 90 days horizon Sysmex Corp is expected to under-perform the Coloplast A/S. In addition to that, Sysmex Corp is 1.07 times more volatile than Coloplast AS. It trades about -0.19 of its total potential returns per unit of risk. Coloplast AS is currently generating about -0.16 per unit of volatility. If you would invest  12,265  in Coloplast AS on December 1, 2024 and sell it today you would lose (1,352) from holding Coloplast AS or give up 11.02% of portfolio value over 90 days.

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

Sysmex Corp  vs.  Coloplast AS

Sysmex Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sysmex Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Coloplast A/S

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sysmex Corp and Coloplast A/S

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

The idea behind Sysmex Corp and Coloplast 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.