Correlation Between Streamwide and Claranova
Can any of the company-specific risk be diversified away by investing in both Streamwide 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 Streamwide and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Streamwide and Claranova SE, you can compare the effects of market volatilities on Streamwide 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 Streamwide with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Streamwide and Claranova.
Diversification Opportunities for Streamwide and Claranova
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Streamwide and Claranova is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Streamwide and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Streamwide 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 Streamwide 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 Streamwide i.e., Streamwide and Claranova go up and down completely randomly.
Pair Corralation between Streamwide and Claranova
Assuming the 90 days trading horizon Streamwide is expected to generate 0.65 times more return on investment than Claranova. However, Streamwide is 1.53 times less risky than Claranova. It trades about 0.06 of its potential returns per unit of risk. Claranova SE is currently generating about -0.02 per unit of risk. If you would invest 1,800 in Streamwide on August 30, 2024 and sell it today you would earn a total of 1,310 from holding Streamwide or generate 72.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Streamwide vs. Claranova SE
Performance |
| Timeline |
| Streamwide |
| Claranova SE |
Streamwide and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Streamwide and Claranova
The main advantage of trading using opposite Streamwide and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Streamwide 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.| Streamwide vs. Aubay Socit Anonyme | Streamwide vs. Infotel SA | Streamwide vs. IT Link | Streamwide vs. Manitou BF SA |
| Claranova vs. Sword Group SE | Claranova vs. Neurones | Claranova vs. Aubay Socit Anonyme | Claranova vs. Groupe CRIT 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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