Correlation Between Softronic and Svedbergs
Can any of the company-specific risk be diversified away by investing in both Softronic and Svedbergs 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 Svedbergs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softronic AB and Svedbergs i Dalstorp, you can compare the effects of market volatilities on Softronic and Svedbergs 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 Svedbergs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softronic and Svedbergs.
Diversification Opportunities for Softronic and Svedbergs
Very weak diversification
The 3 months correlation between Softronic and Svedbergs is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Softronic AB and Svedbergs i Dalstorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svedbergs i Dalstorp 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 Svedbergs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svedbergs i Dalstorp has no effect on the direction of Softronic i.e., Softronic and Svedbergs go up and down completely randomly.
Pair Corralation between Softronic and Svedbergs
Assuming the 90 days trading horizon Softronic is expected to generate 3.74 times less return on investment than Svedbergs. In addition to that, Softronic is 1.04 times more volatile than Svedbergs i Dalstorp. It trades about 0.01 of its total potential returns per unit of risk. Svedbergs i Dalstorp is currently generating about 0.05 per unit of volatility. If you would invest 4,190 in Svedbergs i Dalstorp on November 3, 2024 and sell it today you would earn a total of 60.00 from holding Svedbergs i Dalstorp or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Softronic AB vs. Svedbergs i Dalstorp
Performance |
| Timeline |
| Softronic AB |
| Svedbergs i Dalstorp |
Softronic and Svedbergs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softronic and Svedbergs
The main advantage of trading using opposite Softronic and Svedbergs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softronic position performs unexpectedly, Svedbergs 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 Svedbergs will offset losses from the drop in Svedbergs' long position.| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT Group |
| Svedbergs vs. Systemair AB | Svedbergs vs. Softronic AB | Svedbergs vs. Inwido AB | Svedbergs vs. Lindab International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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