Correlation Between Softronic and Addnode Group
Can any of the company-specific risk be diversified away by investing in both Softronic and Addnode 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 Softronic and Addnode Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softronic AB and Addnode Group AB, you can compare the effects of market volatilities on Softronic and Addnode 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 Softronic with a short position of Addnode Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softronic and Addnode Group.
Diversification Opportunities for Softronic and Addnode Group
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Softronic and Addnode is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Softronic AB and Addnode Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addnode Group AB and Softronic 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 Softronic AB are associated (or correlated) with Addnode Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addnode Group AB has no effect on the direction of Softronic i.e., Softronic and Addnode Group go up and down completely randomly.
Pair Corralation between Softronic and Addnode Group
Assuming the 90 days trading horizon Softronic AB is expected to under-perform the Addnode Group. But the stock apears to be less risky and, when comparing its historical volatility, Softronic AB is 2.76 times less risky than Addnode Group. The stock trades about -0.1 of its potential returns per unit of risk. The Addnode Group AB is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 9,900 in Addnode Group AB on November 10, 2024 and sell it today you would earn a total of 1,830 from holding Addnode Group AB or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Softronic AB vs. Addnode Group AB
Performance |
| Timeline |
| Softronic AB |
| Addnode Group AB |
Softronic and Addnode Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softronic and Addnode Group
The main advantage of trading using opposite Softronic and Addnode Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softronic position performs unexpectedly, Addnode 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 Addnode Group will offset losses from the drop in Addnode Group's long position.| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT Group |
| Addnode Group vs. Lagercrantz Group AB | Addnode Group vs. Addtech AB | Addnode Group vs. Vitec Software Group | Addnode Group vs. AddLife 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |