Correlation Between Sydbank AS and Fynske Bank
Can any of the company-specific risk be diversified away by investing in both Sydbank AS and Fynske Bank 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 Fynske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank AS and Fynske Bank AS, you can compare the effects of market volatilities on Sydbank AS and Fynske Bank 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 Fynske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank AS and Fynske Bank.
Diversification Opportunities for Sydbank AS and Fynske Bank
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sydbank and Fynske is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank AS and Fynske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fynske Bank 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 Fynske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fynske Bank AS has no effect on the direction of Sydbank AS i.e., Sydbank AS and Fynske Bank go up and down completely randomly.
Pair Corralation between Sydbank AS and Fynske Bank
Assuming the 90 days trading horizon Sydbank AS is expected to generate 1.13 times less return on investment than Fynske Bank. But when comparing it to its historical volatility, Sydbank AS is 1.45 times less risky than Fynske Bank. It trades about 0.11 of its potential returns per unit of risk. Fynske Bank AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 16,000 in Fynske Bank AS on January 24, 2024 and sell it today you would earn a total of 400.00 from holding Fynske Bank AS or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank AS vs. Fynske Bank AS
Performance |
| Timeline |
| Sydbank AS |
| Fynske Bank AS |
Sydbank AS and Fynske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank AS and Fynske Bank
The main advantage of trading using opposite Sydbank AS and Fynske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank AS position performs unexpectedly, Fynske Bank 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 Fynske Bank will offset losses from the drop in Fynske Bank's long position.| Sydbank AS vs. Bavarian Nordic | Sydbank AS vs. DSV Panalpina AS | Sydbank AS vs. Vestas Wind Systems | Sydbank AS vs. Ambu AS |
| Fynske Bank vs. Bavarian Nordic | Fynske Bank vs. DSV Panalpina AS | Fynske Bank vs. Vestas Wind Systems | Fynske Bank vs. Ambu AS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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