Correlation Between GBS Software and PSI Software
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By analyzing existing cross correlation between GBS Software AG and PSI Software AG, you can compare the effects of market volatilities on GBS Software and PSI 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 GBS Software with a short position of PSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and PSI Software.
Diversification Opportunities for GBS Software and PSI Software
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GBS and PSI is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and PSI Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI Software AG and GBS 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 GBS Software AG are associated (or correlated) with PSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI Software AG has no effect on the direction of GBS Software i.e., GBS Software and PSI Software go up and down completely randomly.
Pair Corralation between GBS Software and PSI Software
Assuming the 90 days trading horizon GBS Software AG is expected to generate 2.31 times more return on investment than PSI Software. However, GBS Software is 2.31 times more volatile than PSI Software AG. It trades about 0.16 of its potential returns per unit of risk. PSI Software AG is currently generating about 0.04 per unit of risk. If you would invest 230.00 in GBS Software AG on November 1, 2024 and sell it today you would earn a total of 50.00 from holding GBS Software AG or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. PSI Software AG
Performance |
| Timeline |
| GBS Software AG |
| PSI Software AG |
GBS Software and PSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and PSI Software
The main advantage of trading using opposite GBS Software and PSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, PSI 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 PSI Software will offset losses from the drop in PSI Software's long position.| GBS Software vs. TITAN MACHINERY | GBS Software vs. Lamar Advertising | GBS Software vs. GungHo Online Entertainment | GBS Software vs. North American Construction |
| PSI Software vs. DETALION GAMES SA | PSI Software vs. Silicon Motion Technology | PSI Software vs. TROPHY GAMES DEV | PSI Software vs. SCANSOURCE |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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