Correlation Between SOFTWARE MANSION and Balticon
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Balticon 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 SOFTWARE MANSION and Balticon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTWARE MANSION SPOLKA and Balticon, you can compare the effects of market volatilities on SOFTWARE MANSION and Balticon 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 SOFTWARE MANSION with a short position of Balticon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Balticon.
Diversification Opportunities for SOFTWARE MANSION and Balticon
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOFTWARE and Balticon is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Balticon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balticon and SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA are associated (or correlated) with Balticon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balticon has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Balticon go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and Balticon
Assuming the 90 days trading horizon SOFTWARE MANSION is expected to generate 1.15 times less return on investment than Balticon. In addition to that, SOFTWARE MANSION is 1.1 times more volatile than Balticon. It trades about 0.02 of its total potential returns per unit of risk. Balticon is currently generating about 0.03 per unit of volatility. If you would invest 1,136 in Balticon on August 30, 2024 and sell it today you would earn a total of 204.00 from holding Balticon or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.79% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. Balticon
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| Balticon |
SOFTWARE MANSION and Balticon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and Balticon
The main advantage of trading using opposite SOFTWARE MANSION and Balticon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Balticon 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 Balticon will offset losses from the drop in Balticon's long position.| SOFTWARE MANSION vs. Quantum Software SA | SOFTWARE MANSION vs. Creotech Instruments SA | SOFTWARE MANSION vs. New Tech Venture | SOFTWARE MANSION vs. Intersport Polska SA |
| Balticon vs. LSI Software SA | Balticon vs. Road Studio SA | Balticon vs. SOFTWARE MANSION SPOLKA | Balticon vs. Enter Air SA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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