Correlation Between Sydinvest Virksomhedsoblig and Sparinvest Value

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

By analyzing existing cross correlation between Sydinvest Virksomhedsobligationer HY and Sparinvest Value Emerging, you can compare the effects of market volatilities on Sydinvest Virksomhedsoblig and Sparinvest Value 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 Virksomhedsoblig with a short position of Sparinvest Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydinvest Virksomhedsoblig and Sparinvest Value.

Diversification Opportunities for Sydinvest Virksomhedsoblig and Sparinvest Value

-0.66

Correlation Coefficient

Sydinvest Virksomhedsoblig  Sparinvest Value

Excellent diversification

The 3 months correlation between Sydinvest and Sparinvest is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sydinvest Virksomhedsobligatio and Sparinvest Value Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Value Emerging and Sydinvest Virksomhedsoblig 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 Virksomhedsobligationer HY are associated (or correlated) with Sparinvest Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Value Emerging has no effect on the direction of Sydinvest Virksomhedsoblig i.e., Sydinvest Virksomhedsoblig and Sparinvest Value go up and down completely randomly.

Pair Corralation between Sydinvest Virksomhedsoblig and Sparinvest Value

Assuming the 90 days trading horizon Sydinvest Virksomhedsoblig is expected to generate 1.3 times less return on investment than Sparinvest Value. But when comparing it to its historical volatility, Sydinvest Virksomhedsobligationer HY is 14.88 times less risky than Sparinvest Value. It trades about 0.1 of its potential returns per unit of risk. Sparinvest Value Emerging is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  14,270  in Sparinvest Value Emerging on October 7, 2024 and sell it today you would earn a total of  10.00  from holding Sparinvest Value Emerging or generate 0.07% return on investment over 90 days.

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

Sydinvest Virksomhedsobligatio  vs.  Sparinvest Value Emerging

Sydinvest Virksomhedsoblig

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sydinvest Virksomhedsobligationer HY are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Sydinvest Virksomhedsoblig is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sparinvest Value Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparinvest Value Emerging has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the fund institutional investors.

Pair Trading with Sydinvest Virksomhedsoblig and Sparinvest Value

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

The idea behind Sydinvest Virksomhedsobligationer HY and Sparinvest Value Emerging 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.