Correlation Between SOFTWARE MANSION and E Xim
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and E Xim 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 E Xim 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 E Xim IT, you can compare the effects of market volatilities on SOFTWARE MANSION and E Xim 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 E Xim. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and E Xim.
Diversification Opportunities for SOFTWARE MANSION and E Xim
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOFTWARE and EXM is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and E Xim IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Xim IT 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 E Xim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Xim IT has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and E Xim go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and E Xim
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to under-perform the E Xim. But the stock apears to be less risky and, when comparing its historical volatility, SOFTWARE MANSION SPOLKA is 1.81 times less risky than E Xim. The stock trades about -0.1 of its potential returns per unit of risk. The E Xim IT is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 14,700 in E Xim IT on September 12, 2024 and sell it today you would earn a total of 1,500 from holding E Xim IT or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. E Xim IT
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| E Xim IT |
SOFTWARE MANSION and E Xim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and E Xim
The main advantage of trading using opposite SOFTWARE MANSION and E Xim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, E Xim 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 E Xim will offset losses from the drop in E Xim's long position.| SOFTWARE MANSION vs. Banco Santander SA | SOFTWARE MANSION vs. UniCredit SpA | SOFTWARE MANSION vs. CEZ as | SOFTWARE MANSION vs. Polski Koncern Naftowy |
| E Xim vs. Biztech Konsulting SA | E Xim vs. Quantum Software SA | E Xim vs. Mercator Medical SA | E Xim vs. SOFTWARE MANSION SPOLKA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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