Correlation Between Total Soft and Interflex
Can any of the company-specific risk be diversified away by investing in both Total Soft and Interflex 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 Total Soft and Interflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Interflex Co, you can compare the effects of market volatilities on Total Soft and Interflex 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 Total Soft with a short position of Interflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Interflex.
Diversification Opportunities for Total Soft and Interflex
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Total and Interflex is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Interflex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interflex and Total Soft 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 Total Soft Bank are associated (or correlated) with Interflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interflex has no effect on the direction of Total Soft i.e., Total Soft and Interflex go up and down completely randomly.
Pair Corralation between Total Soft and Interflex
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 1.12 times more return on investment than Interflex. However, Total Soft is 1.12 times more volatile than Interflex Co. It trades about 0.0 of its potential returns per unit of risk. Interflex Co is currently generating about -0.09 per unit of risk. If you would invest 530,000 in Total Soft Bank on September 4, 2024 and sell it today you would lose (41,500) from holding Total Soft Bank or give up 7.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. Interflex Co
Performance |
| Timeline |
| Total Soft Bank |
| Interflex |
Total Soft and Interflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and Interflex
The main advantage of trading using opposite Total Soft and Interflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft position performs unexpectedly, Interflex 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 Interflex will offset losses from the drop in Interflex's long position.| Total Soft vs. Alton Sports CoLtd | Total Soft vs. Kyung In Synthetic Corp | Total Soft vs. Shinhan Inverse Silver | Total Soft vs. Cuckoo Homesys Co |
| Interflex vs. Dongsin Engineering Construction | Interflex vs. Doosan Fuel Cell | Interflex vs. Daishin Balance 1 | Interflex vs. Total Soft Bank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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