Correlation Between Inwido AB and Softronic
Can any of the company-specific risk be diversified away by investing in both Inwido AB 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 Inwido AB and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Softronic AB, you can compare the effects of market volatilities on Inwido AB 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 Inwido AB with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Softronic.
Diversification Opportunities for Inwido AB and Softronic
Very good diversification
The 3 months correlation between Inwido and Softronic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Inwido AB 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 Inwido 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 Inwido AB i.e., Inwido AB and Softronic go up and down completely randomly.
Pair Corralation between Inwido AB and Softronic
Assuming the 90 days trading horizon Inwido AB is expected to generate 1.06 times more return on investment than Softronic. However, Inwido AB is 1.06 times more volatile than Softronic AB. It trades about 0.08 of its potential returns per unit of risk. Softronic AB is currently generating about 0.03 per unit of risk. If you would invest 10,200 in Inwido AB on November 29, 2024 and sell it today you would earn a total of 10,260 from holding Inwido AB or generate 100.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Softronic AB
Performance |
| Timeline |
| Inwido AB |
| Softronic AB |
Inwido AB and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Softronic
The main advantage of trading using opposite Inwido AB and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB 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.| Inwido AB vs. Scandic Hotels Group | Inwido AB vs. Invisio Communications AB | Inwido AB vs. COOR Service Management | Inwido AB vs. JLT Mobile Computers |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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