Correlation Between ViroGates and Sydbank AS

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Can any of the company-specific risk be diversified away by investing in both ViroGates and Sydbank AS 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 ViroGates and Sydbank AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ViroGates AS and Sydbank AS, you can compare the effects of market volatilities on ViroGates and Sydbank AS 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 ViroGates with a short position of Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ViroGates and Sydbank AS.

Diversification Opportunities for ViroGates and Sydbank AS

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between ViroGates and Sydbank is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ViroGates AS and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS and ViroGates 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 ViroGates AS are associated (or correlated) with Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of ViroGates i.e., ViroGates and Sydbank AS go up and down completely randomly.

Pair Corralation between ViroGates and Sydbank AS

Assuming the 90 days trading horizon ViroGates AS is expected to under-perform the Sydbank AS. In addition to that, ViroGates is 3.83 times more volatile than Sydbank AS. It trades about -0.05 of its total potential returns per unit of risk. Sydbank AS is currently generating about 0.07 per unit of volatility. If you would invest  20,820  in Sydbank AS on December 29, 2023 and sell it today you would earn a total of  14,860  from holding Sydbank AS or generate 71.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

ViroGates AS  vs.  Sydbank AS

 Performance 
       Timeline  
ViroGates AS 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in ViroGates AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ViroGates displayed solid returns over the last few months and may actually be approaching a breakup point.
Sydbank AS 

Risk-Adjusted Performance

20 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Sydbank AS displayed solid returns over the last few months and may actually be approaching a breakup point.

ViroGates and Sydbank AS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ViroGates and Sydbank AS

The main advantage of trading using opposite ViroGates and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ViroGates position performs unexpectedly, Sydbank AS 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 Sydbank AS will offset losses from the drop in Sydbank AS's long position.
The idea behind ViroGates AS and Sydbank 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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