Correlation Between Sydbank AS and Bactiquant

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

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

Diversification Opportunities for Sydbank AS and Bactiquant

-0.09

Correlation Coefficient

Sydbank AS  Bactiquant

Good diversification

The 3 months correlation between Sydbank and Bactiquant is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank AS and Bactiquant AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bactiquant AS and Sydbank AS 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 Sydbank AS are associated (or correlated) with Bactiquant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bactiquant AS has no effect on the direction of Sydbank AS i.e., Sydbank AS and Bactiquant go up and down completely randomly.

Pair Corralation between Sydbank AS and Bactiquant

Assuming the 90 days trading horizon Sydbank AS is expected to generate 0.16 times more return on investment than Bactiquant. However, Sydbank AS is 6.13 times less risky than Bactiquant. It trades about 0.24 of its potential returns per unit of risk. Bactiquant AS is currently generating about -0.12 per unit of risk. If you would invest  38,100  in Sydbank AS on December 2, 2024 and sell it today you would earn a total of  6,180  from holding Sydbank AS or generate 16.22% return on investment over 90 days.

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

Sydbank AS  vs.  Bactiquant AS

Sydbank AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sydbank AS displayed solid returns over the last few months and may actually be approaching a breakup point.

Bactiquant AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bactiquant AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Bactiquant sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sydbank AS and Bactiquant

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

The idea behind Sydbank AS and Bactiquant 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.