Correlation Between FormPipe Software and TF Bank
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and TF Bank 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 TF Bank 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 TF Bank AB, you can compare the effects of market volatilities on FormPipe Software and TF Bank 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 TF Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and TF Bank.
Diversification Opportunities for FormPipe Software and TF Bank
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FormPipe and TFBANK is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and TF Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TF Bank 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 TF Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TF Bank AB has no effect on the direction of FormPipe Software i.e., FormPipe Software and TF Bank go up and down completely randomly.
Pair Corralation between FormPipe Software and TF Bank
Assuming the 90 days trading horizon FormPipe Software is expected to generate 3.76 times less return on investment than TF Bank. In addition to that, FormPipe Software is 1.01 times more volatile than TF Bank AB. It trades about 0.07 of its total potential returns per unit of risk. TF Bank AB is currently generating about 0.26 per unit of volatility. If you would invest 31,200 in TF Bank AB on September 1, 2024 and sell it today you would earn a total of 3,500 from holding TF Bank AB or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. TF Bank AB
Performance |
| Timeline |
| FormPipe Software |
| TF Bank AB |
FormPipe Software and TF Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and TF Bank
The main advantage of trading using opposite FormPipe Software and TF Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, TF Bank 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 TF Bank will offset losses from the drop in TF Bank's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| TF Bank vs. Bure Equity AB | TF Bank vs. Creades AB | TF Bank vs. L E Lundbergfretagen | TF Bank vs. Industrivarden AB ser |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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