Correlation Between Profile Systems and Foodlink
Can any of the company-specific risk be diversified away by investing in both Profile Systems and Foodlink 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 Profile Systems and Foodlink into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profile Systems Software and Foodlink AE, you can compare the effects of market volatilities on Profile Systems and Foodlink 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 Profile Systems with a short position of Foodlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profile Systems and Foodlink.
Diversification Opportunities for Profile Systems and Foodlink
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Profile and Foodlink is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Profile Systems Software and Foodlink AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodlink AE and Profile Systems 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 Profile Systems Software are associated (or correlated) with Foodlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodlink AE has no effect on the direction of Profile Systems i.e., Profile Systems and Foodlink go up and down completely randomly.
Pair Corralation between Profile Systems and Foodlink
Assuming the 90 days trading horizon Profile Systems Software is expected to generate 0.58 times more return on investment than Foodlink. However, Profile Systems Software is 1.71 times less risky than Foodlink. It trades about 0.07 of its potential returns per unit of risk. Foodlink AE is currently generating about 0.0 per unit of risk. If you would invest 304.00 in Profile Systems Software on November 9, 2024 and sell it today you would earn a total of 221.00 from holding Profile Systems Software or generate 72.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.76% |
| Values | Daily Returns |
Profile Systems Software vs. Foodlink AE
Performance |
| Timeline |
| Profile Systems Software |
| Foodlink AE |
Profile Systems and Foodlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profile Systems and Foodlink
The main advantage of trading using opposite Profile Systems and Foodlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profile Systems position performs unexpectedly, Foodlink 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 Foodlink will offset losses from the drop in Foodlink's long position.| Profile Systems vs. Terna Energy Societe | Profile Systems vs. Mytilineos SA | Profile Systems vs. Public Power | Profile Systems vs. Autohellas SA |
| Foodlink vs. Frigoglass SAIC | Foodlink vs. Autohellas SA | Foodlink vs. Public Power | Foodlink vs. Intralot SA Integrated |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |