Correlation Between Fram Skandinavien and Softronic
Can any of the company-specific risk be diversified away by investing in both Fram Skandinavien and Softronic 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 Fram Skandinavien and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fram Skandinavien AB and Softronic AB, you can compare the effects of market volatilities on Fram Skandinavien and Softronic 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 Fram Skandinavien with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fram Skandinavien and Softronic.
Diversification Opportunities for Fram Skandinavien and Softronic
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fram and Softronic is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fram Skandinavien AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Fram Skandinavien 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 Fram Skandinavien AB are associated (or correlated) with Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of Fram Skandinavien i.e., Fram Skandinavien and Softronic go up and down completely randomly.
Pair Corralation between Fram Skandinavien and Softronic
Assuming the 90 days trading horizon Fram Skandinavien AB is expected to under-perform the Softronic. In addition to that, Fram Skandinavien is 1.45 times more volatile than Softronic AB. It trades about -0.11 of its total potential returns per unit of risk. Softronic AB is currently generating about 0.03 per unit of volatility. If you would invest 1,999 in Softronic AB on August 29, 2024 and sell it today you would earn a total of 351.00 from holding Softronic AB or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fram Skandinavien AB vs. Softronic AB
Performance |
| Timeline |
| Fram Skandinavien |
| Softronic AB |
Fram Skandinavien and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fram Skandinavien and Softronic
The main advantage of trading using opposite Fram Skandinavien and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fram Skandinavien position performs unexpectedly, Softronic 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 Softronic will offset losses from the drop in Softronic's long position.| Fram Skandinavien vs. Softronic AB | Fram Skandinavien vs. Prevas AB | Fram Skandinavien vs. FormPipe Software AB | Fram Skandinavien vs. Dedicare AB |
| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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