Correlation Between Safetech Innovations and Feper SA
Can any of the company-specific risk be diversified away by investing in both Safetech Innovations and Feper SA 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 Safetech Innovations and Feper SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safetech Innovations SA and Feper SA, you can compare the effects of market volatilities on Safetech Innovations and Feper SA 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 Safetech Innovations with a short position of Feper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safetech Innovations and Feper SA.
Diversification Opportunities for Safetech Innovations and Feper SA
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Safetech and Feper is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Safetech Innovations SA and Feper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feper SA and Safetech Innovations 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 Safetech Innovations SA are associated (or correlated) with Feper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feper SA has no effect on the direction of Safetech Innovations i.e., Safetech Innovations and Feper SA go up and down completely randomly.
Pair Corralation between Safetech Innovations and Feper SA
Assuming the 90 days trading horizon Safetech Innovations SA is expected to generate 0.38 times more return on investment than Feper SA. However, Safetech Innovations SA is 2.61 times less risky than Feper SA. It trades about 0.05 of its potential returns per unit of risk. Feper SA is currently generating about -0.05 per unit of risk. If you would invest 94.00 in Safetech Innovations SA on October 23, 2024 and sell it today you would earn a total of 1.00 from holding Safetech Innovations SA or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safetech Innovations SA vs. Feper SA
Performance |
| Timeline |
| Safetech Innovations |
| Feper SA |
Safetech Innovations and Feper SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safetech Innovations and Feper SA
The main advantage of trading using opposite Safetech Innovations and Feper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safetech Innovations position performs unexpectedly, Feper SA 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 Feper SA will offset losses from the drop in Feper SA's long position.| Safetech Innovations vs. Digi Communications NV | Safetech Innovations vs. Infinity Capital Investments | Safetech Innovations vs. AROBS TRANSILVANIA SOFTWARE | Safetech Innovations vs. IM Vinaria Purcari |
| Feper SA vs. Digi Communications NV | Feper SA vs. Safetech Innovations SA | Feper SA vs. AROBS TRANSILVANIA SOFTWARE |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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