Correlation Between FormPipe Software and Metacon AB
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Metacon AB 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 Metacon AB 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 Metacon AB, you can compare the effects of market volatilities on FormPipe Software and Metacon AB 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 Metacon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Metacon AB.
Diversification Opportunities for FormPipe Software and Metacon AB
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FormPipe and Metacon is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Metacon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacon AB 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 Metacon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacon AB has no effect on the direction of FormPipe Software i.e., FormPipe Software and Metacon AB go up and down completely randomly.
Pair Corralation between FormPipe Software and Metacon AB
Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 0.34 times more return on investment than Metacon AB. However, FormPipe Software AB is 2.93 times less risky than Metacon AB. It trades about 0.02 of its potential returns per unit of risk. Metacon AB is currently generating about -0.03 per unit of risk. If you would invest 2,218 in FormPipe Software AB on October 28, 2024 and sell it today you would earn a total of 152.00 from holding FormPipe Software AB or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Metacon AB
Performance |
| Timeline |
| FormPipe Software |
| Metacon AB |
FormPipe Software and Metacon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Metacon AB
The main advantage of trading using opposite FormPipe Software and Metacon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Metacon AB 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 Metacon AB will offset losses from the drop in Metacon AB's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| Metacon AB vs. Arion banki hf | Metacon AB vs. Catena Media plc | Metacon AB vs. OptiCept Technologies AB | Metacon AB vs. Nordea Bank Abp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |