Correlation Between FreelanceCom and Claranova
Can any of the company-specific risk be diversified away by investing in both FreelanceCom and Claranova 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 FreelanceCom and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FreelanceCom and Claranova SE, you can compare the effects of market volatilities on FreelanceCom and Claranova 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 FreelanceCom with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of FreelanceCom and Claranova.
Diversification Opportunities for FreelanceCom and Claranova
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FreelanceCom and Claranova is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding FreelanceCom and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and FreelanceCom 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 FreelanceCom are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of FreelanceCom i.e., FreelanceCom and Claranova go up and down completely randomly.
Pair Corralation between FreelanceCom and Claranova
Assuming the 90 days trading horizon FreelanceCom is expected to generate 0.93 times more return on investment than Claranova. However, FreelanceCom is 1.07 times less risky than Claranova. It trades about 0.02 of its potential returns per unit of risk. Claranova SE is currently generating about -0.04 per unit of risk. If you would invest 280.00 in FreelanceCom on September 19, 2024 and sell it today you would earn a total of 2.00 from holding FreelanceCom or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FreelanceCom vs. Claranova SE
Performance |
| Timeline |
| FreelanceCom |
| Claranova SE |
FreelanceCom and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FreelanceCom and Claranova
The main advantage of trading using opposite FreelanceCom and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FreelanceCom position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| FreelanceCom vs. Claranova SE | FreelanceCom vs. SA Catana Group | FreelanceCom vs. Mediantechn | FreelanceCom vs. Groupe LDLC SA |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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