# Correlation Between Sydbank AS and DOW

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

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Can any of the company-specific risk be diversified away by investing in both Sydbank AS and DOW at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Sydbank AS and DOW into the same portfolio which is an essential part of fundamental portfolio management process.

## Diversification Opportunities for Sydbank AS and DOW

 0.31 Correlation DOW

### Weak diversification

The 3 months correlation between Sydbank and DOW is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank AS and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW 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 DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of Sydbank AS i.e. Sydbank AS and DOW go up and down completely randomly.

## Pair Corralation between Sydbank AS and DOW

Assuming 30 trading days horizon, Sydbank AS is expected to generate 1.06 times more return on investment than DOW. However, Sydbank AS is 1.06 times more volatile than DOW. It trades about 0.14 of its potential returns per unit of risk. DOW is currently generating about 0.07 per unit of risk. If you would invest  9,625  in Sydbank AS on May 7, 2020 and sell it today you would earn a total of  2,875  from holding Sydbank AS or generate 29.87% return on investment over 30 days.
 Time Period 3 Months [change] Direction Moves Together Strength Very Weak Accuracy 87.5% Values Daily Returns

## Sydbank AS  vs.  DOW

 Performance (%)
 Timeline
 Predicted Return Density
 Returns

## DOW

### Pair trading matchups for DOW

Check out your portfolio center. Please also try Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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