Correlation Between FORMPIPE SOFTWARE and Fielmann Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE and Fielmann Aktiengesellscha 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 FORMPIPE SOFTWARE and Fielmann Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on FORMPIPE SOFTWARE and Fielmann Aktiengesellscha 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 FORMPIPE SOFTWARE with a short position of Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and Fielmann Aktiengesellscha.
Diversification Opportunities for FORMPIPE SOFTWARE and Fielmann Aktiengesellscha
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FORMPIPE and Fielmann is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha and FORMPIPE 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 FORMPIPE SOFTWARE AB are associated (or correlated) with Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and Fielmann Aktiengesellscha go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and Fielmann Aktiengesellscha
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 3.65 times more return on investment than Fielmann Aktiengesellscha. However, FORMPIPE SOFTWARE is 3.65 times more volatile than Fielmann Aktiengesellschaft. It trades about 0.19 of its potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about -0.39 per unit of risk. If you would invest 188.00 in FORMPIPE SOFTWARE AB on September 3, 2024 and sell it today you would earn a total of 24.00 from holding FORMPIPE SOFTWARE AB or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. Fielmann Aktiengesellschaft
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| Fielmann Aktiengesellscha |
FORMPIPE SOFTWARE and Fielmann Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and Fielmann Aktiengesellscha
The main advantage of trading using opposite FORMPIPE SOFTWARE and Fielmann Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE position performs unexpectedly, Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha will offset losses from the drop in Fielmann Aktiengesellscha's long position.| FORMPIPE SOFTWARE vs. Computer And Technologies | FORMPIPE SOFTWARE vs. Ribbon Communications | FORMPIPE SOFTWARE vs. United Utilities Group | FORMPIPE SOFTWARE vs. COMBA TELECOM SYST |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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