Correlation Between FormPipe Software and Sileon AB
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Sileon 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 Sileon 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 Sileon AB, you can compare the effects of market volatilities on FormPipe Software and Sileon 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Sileon AB.
Diversification Opportunities for FormPipe Software and Sileon AB
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FormPipe and Sileon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of FormPipe Software i.e., FormPipe Software and Sileon AB go up and down completely randomly.
Pair Corralation between FormPipe Software and Sileon AB
Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 0.37 times more return on investment than Sileon AB. However, FormPipe Software AB is 2.72 times less risky than Sileon AB. It trades about 0.02 of its potential returns per unit of risk. Sileon AB is currently generating about -0.09 per unit of risk. If you would invest 2,395 in FormPipe Software AB on October 16, 2024 and sell it today you would earn a total of 205.00 from holding FormPipe Software AB or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Sileon AB
Performance |
| Timeline |
| FormPipe Software |
| Sileon AB |
FormPipe Software and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Sileon AB
The main advantage of trading using opposite FormPipe Software and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Sileon 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 Sileon AB will offset losses from the drop in Sileon 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 |
| Sileon AB vs. Nitro Games Oyj | Sileon AB vs. Spago Nanomedical AB | Sileon AB vs. FormPipe Software AB | Sileon AB vs. Scandic Hotels Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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