Correlation Between SOFTWARE MANSION and Genomtec
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Genomtec 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 Genomtec 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 Genomtec SA, you can compare the effects of market volatilities on SOFTWARE MANSION and Genomtec 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 Genomtec. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Genomtec.
Diversification Opportunities for SOFTWARE MANSION and Genomtec
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SOFTWARE and Genomtec is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Genomtec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genomtec SA 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 Genomtec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genomtec SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Genomtec go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and Genomtec
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to under-perform the Genomtec. But the stock apears to be less risky and, when comparing its historical volatility, SOFTWARE MANSION SPOLKA is 1.82 times less risky than Genomtec. The stock trades about -0.14 of its potential returns per unit of risk. The Genomtec SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 751.00 in Genomtec SA on October 22, 2024 and sell it today you would lose (18.00) from holding Genomtec SA or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. Genomtec SA
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| Genomtec SA |
SOFTWARE MANSION and Genomtec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and Genomtec
The main advantage of trading using opposite SOFTWARE MANSION and Genomtec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Genomtec 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 Genomtec will offset losses from the drop in Genomtec's long position.| SOFTWARE MANSION vs. Quantum Software SA | SOFTWARE MANSION vs. Mlk Foods Public | SOFTWARE MANSION vs. GreenX Metals | SOFTWARE MANSION vs. Mercator Medical SA |
| Genomtec vs. GreenX Metals | Genomtec vs. Cloud Technologies SA | Genomtec vs. SOFTWARE MANSION SPOLKA | Genomtec vs. Road Studio 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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