Correlation Between FormPipe Software and OptiCept Technologies
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and OptiCept Technologies 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 OptiCept Technologies 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 OptiCept Technologies AB, you can compare the effects of market volatilities on FormPipe Software and OptiCept Technologies 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 OptiCept Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and OptiCept Technologies.
Diversification Opportunities for FormPipe Software and OptiCept Technologies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FormPipe and OptiCept is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and OptiCept Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiCept Technologies 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 OptiCept Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiCept Technologies has no effect on the direction of FormPipe Software i.e., FormPipe Software and OptiCept Technologies go up and down completely randomly.
Pair Corralation between FormPipe Software and OptiCept Technologies
Assuming the 90 days trading horizon FormPipe Software is expected to generate 3.14 times less return on investment than OptiCept Technologies. But when comparing it to its historical volatility, FormPipe Software AB is 2.85 times less risky than OptiCept Technologies. It trades about 0.01 of its potential returns per unit of risk. OptiCept Technologies AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 788.00 in OptiCept Technologies AB on August 29, 2024 and sell it today you would lose (278.00) from holding OptiCept Technologies AB or give up 35.28% 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. OptiCept Technologies AB
Performance |
| Timeline |
| FormPipe Software |
| OptiCept Technologies |
FormPipe Software and OptiCept Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and OptiCept Technologies
The main advantage of trading using opposite FormPipe Software and OptiCept Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, OptiCept Technologies 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 OptiCept Technologies will offset losses from the drop in OptiCept Technologies' long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| OptiCept Technologies vs. TradeDoubler AB | OptiCept Technologies vs. Upsales Technology AB | OptiCept Technologies vs. Zenicor Medical Systems | OptiCept Technologies vs. Train Alliance Sweden |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |