Correlation Between FormPipe Software and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Clinical Laserthermia 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 Clinical Laserthermia 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 Clinical Laserthermia Systems, you can compare the effects of market volatilities on FormPipe Software and Clinical Laserthermia 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 Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Clinical Laserthermia.
Diversification Opportunities for FormPipe Software and Clinical Laserthermia
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FormPipe and Clinical is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia 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 Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of FormPipe Software i.e., FormPipe Software and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between FormPipe Software and Clinical Laserthermia
Assuming the 90 days trading horizon FormPipe Software AB is expected to under-perform the Clinical Laserthermia. But the stock apears to be less risky and, when comparing its historical volatility, FormPipe Software AB is 4.39 times less risky than Clinical Laserthermia. The stock trades about -0.09 of its potential returns per unit of risk. The Clinical Laserthermia Systems is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 513.00 in Clinical Laserthermia Systems on August 29, 2024 and sell it today you would lose (43.00) from holding Clinical Laserthermia Systems or give up 8.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Clinical Laserthermia Systems
Performance |
| Timeline |
| FormPipe Software |
| Clinical Laserthermia |
FormPipe Software and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Clinical Laserthermia
The main advantage of trading using opposite FormPipe Software and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Clinical Laserthermia 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 Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| Clinical Laserthermia vs. KABE Group AB | Clinical Laserthermia vs. IAR Systems Group | Clinical Laserthermia vs. Mekonomen AB | Clinical Laserthermia vs. eEducation Albert 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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