Correlation Between Sydinvest Korte and Sparindex INDEX

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

By analyzing existing cross correlation between Sydinvest Korte Obligationer and Sparindex INDEX Bredygtige, you can compare the effects of market volatilities on Sydinvest Korte and Sparindex INDEX 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 Sydinvest Korte with a short position of Sparindex INDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydinvest Korte and Sparindex INDEX.

Diversification Opportunities for Sydinvest Korte and Sparindex INDEX

-0.23

Correlation Coefficient

Sydinvest Korte  Sparindex INDEX

Very good diversification

The 3 months correlation between Sydinvest and Sparindex is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sydinvest Korte Obligationer and Sparindex INDEX Bredygtige in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparindex INDEX Bred and Sydinvest Korte 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 Sydinvest Korte Obligationer are associated (or correlated) with Sparindex INDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparindex INDEX Bred has no effect on the direction of Sydinvest Korte i.e., Sydinvest Korte and Sparindex INDEX go up and down completely randomly.

Pair Corralation between Sydinvest Korte and Sparindex INDEX

Assuming the 90 days trading horizon Sydinvest Korte Obligationer is expected to generate 0.77 times more return on investment than Sparindex INDEX. However, Sydinvest Korte Obligationer is 1.3 times less risky than Sparindex INDEX. It trades about 0.03 of its potential returns per unit of risk. Sparindex INDEX Bredygtige is currently generating about -0.09 per unit of risk. If you would invest  9,746  in Sydinvest Korte Obligationer on October 4, 2024 and sell it today you would earn a total of  106.00  from holding Sydinvest Korte Obligationer or generate 1.09% return on investment over 90 days.

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

Sydinvest Korte Obligationer  vs.  Sparindex INDEX Bredygtige

Sydinvest Korte Obli

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sydinvest Korte Obligationer are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sydinvest Korte is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Sparindex INDEX Bred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparindex INDEX Bredygtige has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Sparindex INDEX is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sydinvest Korte and Sparindex INDEX

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

The idea behind Sydinvest Korte Obligationer and Sparindex INDEX Bredygtige 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.