Correlation Between HomeToGo and Easy Software
Can any of the company-specific risk be diversified away by investing in both HomeToGo and Easy Software 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 HomeToGo and Easy Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Easy Software AG, you can compare the effects of market volatilities on HomeToGo and Easy Software 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 HomeToGo with a short position of Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Easy Software.
Diversification Opportunities for HomeToGo and Easy Software
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HomeToGo and Easy is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG and HomeToGo 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 HomeToGo SE are associated (or correlated) with Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of HomeToGo i.e., HomeToGo and Easy Software go up and down completely randomly.
Pair Corralation between HomeToGo and Easy Software
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the Easy Software. In addition to that, HomeToGo is 1.97 times more volatile than Easy Software AG. It trades about -0.25 of its total potential returns per unit of risk. Easy Software AG is currently generating about -0.01 per unit of volatility. If you would invest 1,820 in Easy Software AG on December 8, 2024 and sell it today you would lose (10.00) from holding Easy Software AG or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HomeToGo SE vs. Easy Software AG
Performance |
| Timeline |
| HomeToGo SE |
| Easy Software AG |
HomeToGo and Easy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Easy Software
The main advantage of trading using opposite HomeToGo and Easy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, Easy Software 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 Easy Software will offset losses from the drop in Easy Software's long position.| HomeToGo vs. 24SEVENOFFICE GROUP AB | ||
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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