Correlation Between Getinge AB and Synsam AB

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

By analyzing existing cross correlation between Getinge AB ser and Synsam AB, you can compare the effects of market volatilities on Getinge AB and Synsam AB 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 Getinge AB with a short position of Synsam AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getinge AB and Synsam AB.

Diversification Opportunities for Getinge AB and Synsam AB

0.75

Correlation Coefficient

Getinge AB  Synsam AB

Poor diversification

The 3 months correlation between Getinge and Synsam is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Getinge AB ser and Synsam AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synsam AB and Getinge AB 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 Getinge AB ser are associated (or correlated) with Synsam AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synsam AB has no effect on the direction of Getinge AB i.e., Getinge AB and Synsam AB go up and down completely randomly.

Pair Corralation between Getinge AB and Synsam AB

Assuming the 90 days trading horizon Getinge AB ser is expected to under-perform the Synsam AB. But the stock apears to be less risky and, when comparing its historical volatility, Getinge AB ser is 1.31 times less risky than Synsam AB. The stock trades about -0.27 of its potential returns per unit of risk. The Synsam AB is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  4,730  in Synsam AB on September 5, 2024 and sell it today you would lose (400.00) from holding Synsam AB or give up 8.46% of portfolio value over 90 days.

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

Getinge AB ser  vs.  Synsam AB

Getinge AB ser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getinge AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Synsam AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synsam AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Getinge AB and Synsam AB

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

The idea behind Getinge AB ser and Synsam AB 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 Global Correlations module to find global opportunities by holding instruments from different markets.