Correlation Between Vitec Software and SSP Group
Can any of the company-specific risk be diversified away by investing in both Vitec Software and SSP Group 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 Vitec Software and SSP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and SSP Group PLC, you can compare the effects of market volatilities on Vitec Software and SSP Group 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 Vitec Software with a short position of SSP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and SSP Group.
Diversification Opportunities for Vitec Software and SSP Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vitec and SSP is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and SSP Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSP Group PLC and Vitec Software 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 Vitec Software Group are associated (or correlated) with SSP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSP Group PLC has no effect on the direction of Vitec Software i.e., Vitec Software and SSP Group go up and down completely randomly.
Pair Corralation between Vitec Software and SSP Group
Assuming the 90 days trading horizon Vitec Software Group is expected to generate 0.94 times more return on investment than SSP Group. However, Vitec Software Group is 1.07 times less risky than SSP Group. It trades about 0.01 of its potential returns per unit of risk. SSP Group PLC is currently generating about -0.01 per unit of risk. If you would invest 50,947 in Vitec Software Group on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Vitec Software Group or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.91% |
| Values | Daily Returns |
Vitec Software Group vs. SSP Group PLC
Performance |
| Timeline |
| Vitec Software Group |
| SSP Group PLC |
Vitec Software and SSP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitec Software and SSP Group
The main advantage of trading using opposite Vitec Software and SSP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software position performs unexpectedly, SSP Group 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 SSP Group will offset losses from the drop in SSP Group's long position.| Vitec Software vs. Intuitive Investments Group | Vitec Software vs. Livermore Investments Group | Vitec Software vs. Indutrade AB | Vitec Software vs. Fevertree Drinks Plc |
| SSP Group vs. Universal Display Corp | SSP Group vs. DXC Technology Co | SSP Group vs. Microchip Technology | SSP Group vs. Sabien Technology Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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