Correlation Between Triad Group and Sydbank

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

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

Diversification Opportunities for Triad Group and Sydbank

0.12

Correlation Coefficient

Triad Group  Sydbank

Average diversification

The 3 months correlation between Triad and Sydbank is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank and Triad Group 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 Triad Group PLC are associated (or correlated) with Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Triad Group i.e., Triad Group and Sydbank go up and down completely randomly.

Pair Corralation between Triad Group and Sydbank

Assuming the 90 days trading horizon Triad Group PLC is expected to under-perform the Sydbank. But the stock apears to be less risky and, when comparing its historical volatility, Triad Group PLC is 1.66 times less risky than Sydbank. The stock trades about -0.49 of its potential returns per unit of risk. The Sydbank is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  35,140  in Sydbank on September 26, 2024 and sell it today you would earn a total of  1,910  from holding Sydbank or generate 5.44% return on investment over 90 days.

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

Triad Group PLC  vs.  Sydbank

Triad Group PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Triad Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sydbank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sydbank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Triad Group and Sydbank

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

The idea behind Triad Group PLC and Sydbank 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.