Correlation Between Profile Systems and General Commercial
Can any of the company-specific risk be diversified away by investing in both Profile Systems and General Commercial 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 General Commercial 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 General Commercial Industrial, you can compare the effects of market volatilities on Profile Systems and General Commercial 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 General Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profile Systems and General Commercial.
Diversification Opportunities for Profile Systems and General Commercial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Profile and General is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Profile Systems Software and General Commercial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Commercial 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 General Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Commercial has no effect on the direction of Profile Systems i.e., Profile Systems and General Commercial go up and down completely randomly.
Pair Corralation between Profile Systems and General Commercial
Assuming the 90 days trading horizon Profile Systems Software is expected to under-perform the General Commercial. But the stock apears to be less risky and, when comparing its historical volatility, Profile Systems Software is 1.45 times less risky than General Commercial. The stock trades about -0.15 of its potential returns per unit of risk. The General Commercial Industrial is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 135.00 in General Commercial Industrial on August 29, 2024 and sell it today you would lose (5.00) from holding General Commercial Industrial or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profile Systems Software vs. General Commercial Industrial
Performance |
| Timeline |
| Profile Systems Software |
| General Commercial |
Profile Systems and General Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profile Systems and General Commercial
The main advantage of trading using opposite Profile Systems and General Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profile Systems position performs unexpectedly, General Commercial 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 General Commercial will offset losses from the drop in General Commercial's long position.| Profile Systems vs. Terna Energy Societe | Profile Systems vs. Mytilineos SA | Profile Systems vs. Public Power | Profile Systems vs. Autohellas SA |
| General Commercial vs. Ekter SA | General Commercial vs. Elton International Trading | General Commercial vs. Piraeus Port Authority | General Commercial vs. Hellenic Petroleum SA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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