Correlation Between Greater Than and Softronic
Can any of the company-specific risk be diversified away by investing in both Greater Than 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 Greater Than and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greater Than AB and Softronic AB, you can compare the effects of market volatilities on Greater Than 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 Greater Than with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greater Than and Softronic.
Diversification Opportunities for Greater Than and Softronic
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greater and Softronic is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Greater Than AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Greater Than 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 Greater Than 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 Greater Than i.e., Greater Than and Softronic go up and down completely randomly.
Pair Corralation between Greater Than and Softronic
Assuming the 90 days trading horizon Greater Than AB is expected to under-perform the Softronic. In addition to that, Greater Than is 2.99 times more volatile than Softronic AB. It trades about -0.03 of its total potential returns per unit of risk. Softronic AB is currently generating about 0.02 per unit of volatility. If you would invest 2,165 in Softronic AB on November 8, 2024 and sell it today you would earn a total of 145.00 from holding Softronic AB or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Greater Than AB vs. Softronic AB
Performance |
| Timeline |
| Greater Than AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Softronic AB |
Greater Than and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greater Than and Softronic
The main advantage of trading using opposite Greater Than and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greater Than 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.| Greater Than vs. BIMobject AB | Greater Than vs. IAR Systems Group | Greater Than vs. FormPipe Software AB | Greater Than vs. Generic Sweden publ |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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