Correlation Between Easy Software and Marks
Can any of the company-specific risk be diversified away by investing in both Easy Software and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on Easy Software and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Marks.
Diversification Opportunities for Easy Software and Marks
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Easy and Marks is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Easy Software i.e., Easy Software and Marks go up and down completely randomly.
Pair Corralation between Easy Software and Marks
Assuming the 90 days trading horizon Easy Software AG is expected to generate 1.17 times more return on investment than Marks. However, Easy Software is 1.17 times more volatile than Marks and Spencer. It trades about -0.02 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.23 per unit of risk. If you would invest 1,840 in Easy Software AG on October 25, 2024 and sell it today you would lose (40.00) from holding Easy Software AG or give up 2.17% 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. Marks and Spencer
Performance |
| Timeline |
| Easy Software AG |
| Marks and Spencer |
Easy Software and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Marks
The main advantage of trading using opposite Easy Software and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Easy Software vs. NXP Semiconductors NV | Easy Software vs. Ryanair Holdings plc | Easy Software vs. SEALED AIR | Easy Software vs. Corsair Gaming |
| Marks vs. IMAGIN MEDICAL INC | Marks vs. WESANA HEALTH HOLD | Marks vs. OPKO HEALTH | Marks vs. Advanced Medical Solutions |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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