Correlation Between Marks and Easy Software
Can any of the company-specific risk be diversified away by investing in both Marks 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 Marks and Easy Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marks and Spencer and Easy Software AG, you can compare the effects of market volatilities on Marks 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 Marks with a short position of Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marks and Easy Software.
Diversification Opportunities for Marks and Easy Software
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marks and Easy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Marks and Spencer 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 Marks 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 Marks and Spencer 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 Marks i.e., Marks and Easy Software go up and down completely randomly.
Pair Corralation between Marks and Easy Software
Assuming the 90 days horizon Marks and Spencer is expected to under-perform the Easy Software. But the stock apears to be less risky and, when comparing its historical volatility, Marks and Spencer is 1.17 times less risky than Easy Software. The stock trades about -0.23 of its potential returns per unit of risk. The Easy Software AG is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Easy Software AG on October 25, 2024 and sell it today you would lose (40.00) from holding Easy Software AG or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marks and Spencer vs. Easy Software AG
Performance |
| Timeline |
| Marks and Spencer |
| Easy Software AG |
Marks and Easy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marks and Easy Software
The main advantage of trading using opposite Marks and Easy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marks 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.| Marks vs. IMAGIN MEDICAL INC | Marks vs. WESANA HEALTH HOLD | Marks vs. OPKO HEALTH | Marks vs. Advanced Medical Solutions |
| Easy Software vs. NXP Semiconductors NV | Easy Software vs. Ryanair Holdings plc | Easy Software vs. SEALED AIR | Easy Software vs. Corsair Gaming |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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