Correlation Between Proact IT and EWork Group
Can any of the company-specific risk be diversified away by investing in both Proact IT and EWork 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 Proact IT and EWork Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proact IT Group and eWork Group AB, you can compare the effects of market volatilities on Proact IT and EWork 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 Proact IT with a short position of EWork Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proact IT and EWork Group.
Diversification Opportunities for Proact IT and EWork Group
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Proact and EWork is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and eWork Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eWork Group AB and Proact IT 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 Proact IT Group are associated (or correlated) with EWork Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eWork Group AB has no effect on the direction of Proact IT i.e., Proact IT and EWork Group go up and down completely randomly.
Pair Corralation between Proact IT and EWork Group
Assuming the 90 days trading horizon Proact IT Group is expected to under-perform the EWork Group. In addition to that, Proact IT is 1.61 times more volatile than eWork Group AB. It trades about -0.11 of its total potential returns per unit of risk. eWork Group AB is currently generating about -0.06 per unit of volatility. If you would invest 14,040 in eWork Group AB on September 1, 2024 and sell it today you would lose (140.00) from holding eWork Group AB or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proact IT Group vs. eWork Group AB
Performance |
| Timeline |
| Proact IT Group |
| eWork Group AB |
Proact IT and EWork Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proact IT and EWork Group
The main advantage of trading using opposite Proact IT and EWork Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proact IT position performs unexpectedly, EWork 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 EWork Group will offset losses from the drop in EWork Group's long position.| Proact IT vs. Enea AB | Proact IT vs. Novotek AB | Proact IT vs. Addnode Group AB | Proact IT vs. Softronic AB |
| EWork Group vs. Softronic AB | EWork Group vs. Proact IT Group | EWork Group vs. Inwido AB | EWork Group vs. NOTE 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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