Correlation Between Easy Software and PREMIER FOODS
Can any of the company-specific risk be diversified away by investing in both Easy Software and PREMIER FOODS 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 Easy Software and PREMIER FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and PREMIER FOODS, you can compare the effects of market volatilities on Easy Software and PREMIER FOODS 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 Easy Software with a short position of PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and PREMIER FOODS.
Diversification Opportunities for Easy Software and PREMIER FOODS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Easy and PREMIER is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS and Easy 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 Easy Software AG are associated (or correlated) with PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of Easy Software i.e., Easy Software and PREMIER FOODS go up and down completely randomly.
Pair Corralation between Easy Software and PREMIER FOODS
Assuming the 90 days trading horizon Easy Software AG is expected to generate 2.15 times more return on investment than PREMIER FOODS. However, Easy Software is 2.15 times more volatile than PREMIER FOODS. It trades about -0.06 of its potential returns per unit of risk. PREMIER FOODS is currently generating about -0.3 per unit of risk. If you would invest 1,890 in Easy Software AG on October 20, 2024 and sell it today you would lose (90.00) from holding Easy Software AG or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. PREMIER FOODS
Performance |
| Timeline |
| Easy Software AG |
| PREMIER FOODS |
Easy Software and PREMIER FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and PREMIER FOODS
The main advantage of trading using opposite Easy Software and PREMIER FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, PREMIER FOODS 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 PREMIER FOODS will offset losses from the drop in PREMIER FOODS's long position.| Easy Software vs. FAIR ISAAC | Easy Software vs. ITALIAN WINE BRANDS | Easy Software vs. SEALED AIR | Easy Software vs. Air New Zealand |
| PREMIER FOODS vs. Easy Software AG | PREMIER FOODS vs. DeVry Education Group | PREMIER FOODS vs. Magic Software Enterprises | PREMIER FOODS vs. PSI Software AG |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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