Correlation Between Inwido AB and Vitec Software
Can any of the company-specific risk be diversified away by investing in both Inwido AB and Vitec 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 Inwido AB and Vitec Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inwido AB and Vitec Software Group, you can compare the effects of market volatilities on Inwido AB and Vitec 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 Inwido AB with a short position of Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Vitec Software.
Diversification Opportunities for Inwido AB and Vitec Software
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inwido and Vitec is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group 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 Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Inwido AB i.e., Inwido AB and Vitec Software go up and down completely randomly.
Pair Corralation between Inwido AB and Vitec Software
Assuming the 90 days trading horizon Inwido AB is expected to generate 2.87 times less return on investment than Vitec Software. But when comparing it to its historical volatility, Inwido AB is 1.38 times less risky than Vitec Software. It trades about 0.09 of its potential returns per unit of risk. Vitec Software Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 47,733 in Vitec Software Group on November 6, 2024 and sell it today you would earn a total of 10,417 from holding Vitec Software Group or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inwido AB vs. Vitec Software Group
Performance |
| Timeline |
| Inwido AB |
| Vitec Software Group |
Inwido AB and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inwido AB and Vitec Software
The main advantage of trading using opposite Inwido AB and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inwido AB position performs unexpectedly, Vitec 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| Inwido AB vs. FormPipe Software AB | Inwido AB vs. MTI Investment SE | Inwido AB vs. High Coast Distillery | Inwido AB vs. Sdiptech AB |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software vs. Instalco Intressenter AB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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