Correlation Between Diadrom Holding and Softronic
Can any of the company-specific risk be diversified away by investing in both Diadrom Holding 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 Diadrom Holding and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diadrom Holding AB and Softronic AB, you can compare the effects of market volatilities on Diadrom Holding 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 Diadrom Holding with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diadrom Holding and Softronic.
Diversification Opportunities for Diadrom Holding and Softronic
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diadrom and Softronic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Diadrom Holding AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Diadrom Holding 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 Diadrom Holding 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 Diadrom Holding i.e., Diadrom Holding and Softronic go up and down completely randomly.
Pair Corralation between Diadrom Holding and Softronic
If you would invest 2,165 in Softronic AB on November 8, 2024 and sell it today you would earn a total of 145.00 from holding Softronic AB or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Diadrom Holding AB vs. Softronic AB
Performance |
| Timeline |
| Diadrom Holding AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Softronic AB |
Diadrom Holding and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diadrom Holding and Softronic
The main advantage of trading using opposite Diadrom Holding and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diadrom Holding 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.| Diadrom Holding vs. Generic Sweden publ | Diadrom Holding vs. Avensia publ AB | Diadrom Holding vs. Softronic AB | Diadrom Holding vs. eWork Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |