Correlation Between FormPipe Software and B3 Consulting
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and B3 Consulting 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 B3 Consulting 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 B3 Consulting Group, you can compare the effects of market volatilities on FormPipe Software and B3 Consulting 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 B3 Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and B3 Consulting.
Diversification Opportunities for FormPipe Software and B3 Consulting
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FormPipe and B3 Consulting is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and B3 Consulting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B3 Consulting Group 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 B3 Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B3 Consulting Group has no effect on the direction of FormPipe Software i.e., FormPipe Software and B3 Consulting go up and down completely randomly.
Pair Corralation between FormPipe Software and B3 Consulting
Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 1.27 times more return on investment than B3 Consulting. However, FormPipe Software is 1.27 times more volatile than B3 Consulting Group. It trades about -0.09 of its potential returns per unit of risk. B3 Consulting Group is currently generating about -0.17 per unit of risk. If you would invest 2,480 in FormPipe Software AB on September 24, 2024 and sell it today you would lose (120.00) from holding FormPipe Software AB or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. B3 Consulting Group
Performance |
| Timeline |
| FormPipe Software |
| B3 Consulting Group |
FormPipe Software and B3 Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and B3 Consulting
The main advantage of trading using opposite FormPipe Software and B3 Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, B3 Consulting 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 B3 Consulting will offset losses from the drop in B3 Consulting's long position.| FormPipe Software vs. Lagercrantz Group AB | FormPipe Software vs. Vitec Software Group | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Inwido AB |
| B3 Consulting vs. FormPipe Software AB | B3 Consulting vs. Micro Systemation AB | B3 Consulting vs. CTT Systems AB | B3 Consulting vs. CAG Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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