Correlation Between OPERA SOFTWARE and Swatch Group
Can any of the company-specific risk be diversified away by investing in both OPERA SOFTWARE and Swatch Group 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 OPERA SOFTWARE and Swatch Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPERA SOFTWARE and The Swatch Group, you can compare the effects of market volatilities on OPERA SOFTWARE and Swatch Group 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 OPERA SOFTWARE with a short position of Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and Swatch Group.
Diversification Opportunities for OPERA SOFTWARE and Swatch Group
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OPERA and Swatch is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group and OPERA 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 OPERA SOFTWARE are associated (or correlated) with Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and Swatch Group go up and down completely randomly.
Pair Corralation between OPERA SOFTWARE and Swatch Group
Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 0.76 times more return on investment than Swatch Group. However, OPERA SOFTWARE is 1.32 times less risky than Swatch Group. It trades about 0.07 of its potential returns per unit of risk. The Swatch Group is currently generating about -0.03 per unit of risk. If you would invest 63.00 in OPERA SOFTWARE on October 16, 2024 and sell it today you would earn a total of 1.00 from holding OPERA SOFTWARE or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
OPERA SOFTWARE vs. The Swatch Group
Performance |
| Timeline |
| OPERA SOFTWARE |
| Swatch Group |
OPERA SOFTWARE and Swatch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPERA SOFTWARE and Swatch Group
The main advantage of trading using opposite OPERA SOFTWARE and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPERA SOFTWARE position performs unexpectedly, Swatch Group 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 Swatch Group will offset losses from the drop in Swatch Group's long position.| OPERA SOFTWARE vs. Astral Foods Limited | OPERA SOFTWARE vs. Austevoll Seafood ASA | OPERA SOFTWARE vs. CN MODERN DAIRY | OPERA SOFTWARE vs. PDS Biotechnology Corp |
| Swatch Group vs. OPERA SOFTWARE | Swatch Group vs. ASURE SOFTWARE | Swatch Group vs. Constellation Software | Swatch Group vs. AOYAMA TRADING |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |