Correlation Between FORMPIPE SOFTWARE and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE and KENEDIX OFFICE 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 KENEDIX OFFICE 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 KENEDIX OFFICE INV, you can compare the effects of market volatilities on FORMPIPE SOFTWARE and KENEDIX OFFICE 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and KENEDIX OFFICE.
Diversification Opportunities for FORMPIPE SOFTWARE and KENEDIX OFFICE
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FORMPIPE and KENEDIX is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and KENEDIX OFFICE
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 1.87 times more return on investment than KENEDIX OFFICE. However, FORMPIPE SOFTWARE is 1.87 times more volatile than KENEDIX OFFICE INV. It trades about 0.04 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about -0.03 per unit of risk. If you would invest 144.00 in FORMPIPE SOFTWARE AB on September 12, 2024 and sell it today you would earn a total of 65.00 from holding FORMPIPE SOFTWARE AB or generate 45.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| KENEDIX OFFICE INV |
FORMPIPE SOFTWARE and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and KENEDIX OFFICE
The main advantage of trading using opposite FORMPIPE SOFTWARE and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| FORMPIPE SOFTWARE vs. Salesforce | FORMPIPE SOFTWARE vs. Superior Plus Corp | FORMPIPE SOFTWARE vs. SIVERS SEMICONDUCTORS AB | FORMPIPE SOFTWARE vs. Norsk Hydro ASA |
| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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