Correlation Between FormPipe Software and Cinis Fertilizer
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Cinis Fertilizer 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 Cinis Fertilizer 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 Cinis Fertilizer AB, you can compare the effects of market volatilities on FormPipe Software and Cinis Fertilizer 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 Cinis Fertilizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Cinis Fertilizer.
Diversification Opportunities for FormPipe Software and Cinis Fertilizer
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FormPipe and Cinis is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Cinis Fertilizer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinis Fertilizer 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 Cinis Fertilizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinis Fertilizer has no effect on the direction of FormPipe Software i.e., FormPipe Software and Cinis Fertilizer go up and down completely randomly.
Pair Corralation between FormPipe Software and Cinis Fertilizer
Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 0.52 times more return on investment than Cinis Fertilizer. However, FormPipe Software AB is 1.91 times less risky than Cinis Fertilizer. It trades about 0.02 of its potential returns per unit of risk. Cinis Fertilizer AB is currently generating about -0.06 per unit of risk. If you would invest 2,366 in FormPipe Software AB on August 25, 2024 and sell it today you would earn a total of 154.00 from holding FormPipe Software AB or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Cinis Fertilizer AB
Performance |
| Timeline |
| FormPipe Software |
| Cinis Fertilizer |
FormPipe Software and Cinis Fertilizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Cinis Fertilizer
The main advantage of trading using opposite FormPipe Software and Cinis Fertilizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Cinis Fertilizer 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 Cinis Fertilizer will offset losses from the drop in Cinis Fertilizer's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| Cinis Fertilizer vs. FormPipe Software AB | Cinis Fertilizer vs. Catena Media plc | Cinis Fertilizer vs. Addtech AB | Cinis Fertilizer vs. Invisio Communications 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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