Correlation Between SOFTWARE MANSION and Igoria Trade
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Igoria Trade 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 Igoria Trade 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 Igoria Trade SA, you can compare the effects of market volatilities on SOFTWARE MANSION and Igoria Trade 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 Igoria Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Igoria Trade.
Diversification Opportunities for SOFTWARE MANSION and Igoria Trade
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SOFTWARE and Igoria is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Igoria Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Igoria Trade 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 Igoria Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Igoria Trade SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Igoria Trade go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and Igoria Trade
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to under-perform the Igoria Trade. But the stock apears to be less risky and, when comparing its historical volatility, SOFTWARE MANSION SPOLKA is 1.54 times less risky than Igoria Trade. The stock trades about -0.07 of its potential returns per unit of risk. The Igoria Trade SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Igoria Trade SA on August 28, 2024 and sell it today you would lose (1.00) from holding Igoria Trade SA or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. Igoria Trade SA
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| Igoria Trade SA |
SOFTWARE MANSION and Igoria Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and Igoria Trade
The main advantage of trading using opposite SOFTWARE MANSION and Igoria Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Igoria Trade 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 Igoria Trade will offset losses from the drop in Igoria Trade'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 |
| Igoria Trade vs. Asseco Business Solutions | Igoria Trade vs. Detalion Games SA | Igoria Trade vs. Asseco South Eastern | Igoria Trade vs. Movie Games 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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