Correlation Between EWork Group and Softronic
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
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between EWork and Softronic is 0.16. 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 1.1 times more return on investment than Softronic. However, EWork Group is 1.1 times more volatile than Softronic AB. It trades about 0.03 of its potential returns per unit of risk. Softronic AB is currently generating about 0.03 per unit of risk. If you would invest 11,534 in eWork Group AB on August 24, 2024 and sell it today you would earn a total of 2,426 from holding eWork Group AB or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eWork Group AB vs. Softronic AB
Performance |
| Timeline |
| eWork Group AB |
| Softronic AB |
EWork Group and Softronic Volatility Contrast
Predicted Return Density |
| 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.| EWork Group vs. Enea AB | EWork Group vs. Novotek AB | EWork Group vs. Addnode Group AB | EWork Group vs. Softronic AB |
| Softronic vs. Novotek AB | Softronic vs. Svedbergs i Dalstorp | Softronic vs. Know IT AB | Softronic vs. FormPipe Software AB |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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