Correlation Between Niloerngruppen and Softronic
Can any of the company-specific risk be diversified away by investing in both Niloerngruppen 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 Niloerngruppen and Softronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niloerngruppen AB Series and Softronic AB, you can compare the effects of market volatilities on Niloerngruppen 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 Niloerngruppen with a short position of Softronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niloerngruppen and Softronic.
Diversification Opportunities for Niloerngruppen and Softronic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Niloerngruppen and Softronic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Niloerngruppen AB Series and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Niloerngruppen 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 Niloerngruppen AB Series 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 Niloerngruppen i.e., Niloerngruppen and Softronic go up and down completely randomly.
Pair Corralation between Niloerngruppen and Softronic
Assuming the 90 days trading horizon Niloerngruppen AB Series is expected to under-perform the Softronic. But the stock apears to be less risky and, when comparing its historical volatility, Niloerngruppen AB Series is 1.14 times less risky than Softronic. The stock trades about -0.05 of its potential returns per unit of risk. The Softronic AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Softronic AB on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Softronic AB or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Niloerngruppen AB Series vs. Softronic AB
Performance |
| Timeline |
| Niloerngruppen AB Series |
| Softronic AB |
Niloerngruppen and Softronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niloerngruppen and Softronic
The main advantage of trading using opposite Niloerngruppen and Softronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niloerngruppen 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.| Niloerngruppen vs. Telefonaktiebolaget LM Ericsson | Niloerngruppen vs. Swedbank AB | Niloerngruppen vs. AB Electrolux | Niloerngruppen vs. Investor AB ser |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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