Correlation Between Binero Group and Softronic
Can any of the company-specific risk be diversified away by investing in both Binero Group and Softronic 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 Binero Group and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binero Group AB and Softronic AB, you can compare the effects of market volatilities on Binero Group and Softronic 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 Binero Group with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binero Group and Softronic.
Diversification Opportunities for Binero Group and Softronic
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binero and Softronic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Binero Group AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Binero 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 Binero Group AB are associated (or correlated) with Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of Binero Group i.e., Binero Group and Softronic go up and down completely randomly.
Pair Corralation between Binero Group and Softronic
Assuming the 90 days trading horizon Binero Group AB is expected to generate 3.24 times more return on investment than Softronic. However, Binero Group is 3.24 times more volatile than Softronic AB. It trades about 0.01 of its potential returns per unit of risk. Softronic AB is currently generating about 0.03 per unit of risk. If you would invest 430.00 in Binero Group AB on August 28, 2024 and sell it today you would lose (170.00) from holding Binero Group AB or give up 39.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binero Group AB vs. Softronic AB
Performance |
| Timeline |
| Binero Group AB |
| Softronic AB |
Binero Group and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binero Group and Softronic
The main advantage of trading using opposite Binero Group and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binero Group position performs unexpectedly, Softronic 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 Softronic will offset losses from the drop in Softronic's long position.| Binero Group vs. AAC Clyde Space | Binero Group vs. Mavshack publ AB | Binero Group vs. Tangiamo Touch Technology | Binero Group vs. XMReality AB |
| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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