Correlation Between SOFTWARE MANSION and WAWEL SA
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and WAWEL SA 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 WAWEL SA 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 WAWEL SA, you can compare the effects of market volatilities on SOFTWARE MANSION and WAWEL SA 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 WAWEL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and WAWEL SA.
Diversification Opportunities for SOFTWARE MANSION and WAWEL SA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOFTWARE and WAWEL is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and WAWEL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAWEL 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 WAWEL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAWEL SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and WAWEL SA go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and WAWEL SA
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to under-perform the WAWEL SA. But the stock apears to be less risky and, when comparing its historical volatility, SOFTWARE MANSION SPOLKA is 1.35 times less risky than WAWEL SA. The stock trades about -0.14 of its potential returns per unit of risk. The WAWEL SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 59,200 in WAWEL SA on September 13, 2024 and sell it today you would earn a total of 2,000 from holding WAWEL SA or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. WAWEL SA
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| WAWEL SA |
SOFTWARE MANSION and WAWEL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and WAWEL SA
The main advantage of trading using opposite SOFTWARE MANSION and WAWEL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, WAWEL SA 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 WAWEL SA will offset losses from the drop in WAWEL SA's long position.| SOFTWARE MANSION vs. TEN SQUARE GAMES | SOFTWARE MANSION vs. Igoria Trade SA | SOFTWARE MANSION vs. Quantum Software SA | SOFTWARE MANSION vs. UF Games SA |
| WAWEL SA vs. Banco Santander SA | WAWEL SA vs. UniCredit SpA | WAWEL SA vs. CEZ as | WAWEL SA vs. Polski Koncern Naftowy |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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