Correlation Between Softronic and EWork Group
Can any of the company-specific risk be diversified away by investing in both Softronic 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 Softronic and EWork 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 eWork Group AB, you can compare the effects of market volatilities on Softronic 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 Softronic with a short position of EWork Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softronic and EWork Group.
Diversification Opportunities for Softronic and EWork Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Softronic and EWork is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Softronic AB 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 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 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 Softronic i.e., Softronic and EWork Group go up and down completely randomly.
Pair Corralation between Softronic and EWork Group
Assuming the 90 days trading horizon Softronic AB is expected to generate 1.13 times more return on investment than EWork Group. However, Softronic is 1.13 times more volatile than eWork Group AB. It trades about 0.05 of its potential returns per unit of risk. eWork Group AB is currently generating about 0.02 per unit of risk. If you would invest 1,860 in Softronic AB on November 9, 2024 and sell it today you would earn a total of 450.00 from holding Softronic AB or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Softronic AB vs. eWork Group AB
Performance |
| Timeline |
| Softronic AB |
| eWork Group AB |
Softronic and EWork Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softronic and EWork Group
The main advantage of trading using opposite Softronic and EWork Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softronic 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.| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT Group |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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