Correlation Between Softronic and TradeDoubler
Can any of the company-specific risk be diversified away by investing in both Softronic and TradeDoubler 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 TradeDoubler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softronic AB and TradeDoubler AB, you can compare the effects of market volatilities on Softronic and TradeDoubler 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 TradeDoubler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softronic and TradeDoubler.
Diversification Opportunities for Softronic and TradeDoubler
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Softronic and TradeDoubler is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Softronic AB and TradeDoubler AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TradeDoubler 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 TradeDoubler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TradeDoubler AB has no effect on the direction of Softronic i.e., Softronic and TradeDoubler go up and down completely randomly.
Pair Corralation between Softronic and TradeDoubler
Assuming the 90 days trading horizon Softronic AB is expected to generate 0.5 times more return on investment than TradeDoubler. However, Softronic AB is 1.98 times less risky than TradeDoubler. It trades about 0.12 of its potential returns per unit of risk. TradeDoubler AB is currently generating about 0.05 per unit of risk. If you would invest 2,360 in Softronic AB on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Softronic AB or generate 3.18% 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. TradeDoubler AB
Performance |
| Timeline |
| Softronic AB |
| TradeDoubler AB |
Softronic and TradeDoubler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softronic and TradeDoubler
The main advantage of trading using opposite Softronic and TradeDoubler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softronic position performs unexpectedly, TradeDoubler 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 TradeDoubler will offset losses from the drop in TradeDoubler's long position.| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT Group |
| TradeDoubler vs. Precise Biometrics AB | TradeDoubler vs. BE Group AB | TradeDoubler vs. Eniro AB | TradeDoubler vs. Softronic 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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