Correlation Between Exsitec Holding and CodeMill
Can any of the company-specific risk be diversified away by investing in both Exsitec Holding and CodeMill 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 Exsitec Holding and CodeMill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exsitec Holding AB and CodeMill AB, you can compare the effects of market volatilities on Exsitec Holding and CodeMill 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 Exsitec Holding with a short position of CodeMill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exsitec Holding and CodeMill.
Diversification Opportunities for Exsitec Holding and CodeMill
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Exsitec and CodeMill is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and CodeMill AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CodeMill AB and Exsitec 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 Exsitec Holding AB are associated (or correlated) with CodeMill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CodeMill AB has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and CodeMill go up and down completely randomly.
Pair Corralation between Exsitec Holding and CodeMill
Assuming the 90 days trading horizon Exsitec Holding AB is expected to generate 0.6 times more return on investment than CodeMill. However, Exsitec Holding AB is 1.66 times less risky than CodeMill. It trades about -0.2 of its potential returns per unit of risk. CodeMill AB is currently generating about -0.12 per unit of risk. If you would invest 17,850 in Exsitec Holding AB on August 28, 2024 and sell it today you would lose (3,350) from holding Exsitec Holding AB or give up 18.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exsitec Holding AB vs. CodeMill AB
Performance |
| Timeline |
| Exsitec Holding AB |
| CodeMill AB |
Exsitec Holding and CodeMill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exsitec Holding and CodeMill
The main advantage of trading using opposite Exsitec Holding and CodeMill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exsitec Holding position performs unexpectedly, CodeMill 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 CodeMill will offset losses from the drop in CodeMill's long position.| Exsitec Holding vs. Svedbergs i Dalstorp | Exsitec Holding vs. Know IT AB | Exsitec Holding vs. FormPipe Software AB |
| CodeMill vs. CAG Group AB | CodeMill vs. Checkin Group AB | CodeMill vs. Exsitec Holding AB | CodeMill vs. Divio Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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