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

0.14

Correlation Coefficient

Sysmex Corp  Coloplast A/S

Average diversification

The 3 months correlation between Sysmex and Coloplast is 0.14. 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 generate 1.16 times more return on investment than Coloplast A/S. However, Sysmex Corp is 1.16 times more volatile than Coloplast AS. It trades about 0.04 of its potential returns per unit of risk. Coloplast AS is currently generating about -0.06 per unit of risk. If you would invest  1,834  in Sysmex Corp on December 30, 2024 and sell it today you would earn a total of  46.00  from holding Sysmex Corp or generate 2.51% return on investment over 90 days.

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

Sysmex Corp  vs.  Coloplast AS

Sysmex Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sysmex Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sysmex Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 nearly stable fundamental drivers, Coloplast A/S is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.