Correlation Between EWork Group and Softronic

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Can any of the company-specific risk be diversified away by investing in both EWork 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 EWork Group and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eWork Group AB and Softronic AB, you can compare the effects of market volatilities on EWork 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 EWork Group with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of EWork Group and Softronic.

Diversification Opportunities for EWork Group and Softronic

EWorkSoftronicDiversified AwayEWorkSoftronicDiversified Away100%
-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between EWork and Softronic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding eWork 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 EWork 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 eWork 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 EWork Group i.e., EWork Group and Softronic go up and down completely randomly.

Pair Corralation between EWork Group and Softronic

Assuming the 90 days trading horizon eWork Group AB is expected to generate 0.86 times more return on investment than Softronic. However, eWork Group AB is 1.16 times less risky than Softronic. It trades about 0.04 of its potential returns per unit of risk. Softronic AB is currently generating about 0.02 per unit of risk. If you would invest  13,880  in eWork Group AB on November 14, 2024 and sell it today you would earn a total of  720.00  from holding eWork Group AB or generate 5.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

eWork Group AB  vs.  Softronic AB

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510
JavaScript chart by amCharts 3.21.15EWRK SOF-B
       Timeline  
eWork Group AB 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in eWork Group AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, EWork Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb135140145150155
Softronic AB 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Softronic AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2222.52323.52424.525

EWork Group and Softronic Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.35-2.51-1.67-0.830.00.851.712.583.44 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15EWRK SOF-B
       Returns  

Pair Trading with EWork Group and Softronic

The main advantage of trading using opposite EWork Group and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EWork 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.
The idea behind eWork Group AB and Softronic AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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