Correlation Between Sword Group and Streamwide
Can any of the company-specific risk be diversified away by investing in both Sword Group and Streamwide 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 Sword Group and Streamwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sword Group SE and Streamwide, you can compare the effects of market volatilities on Sword Group and Streamwide 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 Sword Group with a short position of Streamwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sword Group and Streamwide.
Diversification Opportunities for Sword Group and Streamwide
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sword and Streamwide is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sword Group SE and Streamwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Streamwide and Sword Group 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 Sword Group SE are associated (or correlated) with Streamwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Streamwide has no effect on the direction of Sword Group i.e., Sword Group and Streamwide go up and down completely randomly.
Pair Corralation between Sword Group and Streamwide
Assuming the 90 days trading horizon Sword Group SE is expected to under-perform the Streamwide. But the stock apears to be less risky and, when comparing its historical volatility, Sword Group SE is 1.35 times less risky than Streamwide. The stock trades about -0.04 of its potential returns per unit of risk. The Streamwide is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,750 in Streamwide on August 28, 2024 and sell it today you would earn a total of 90.00 from holding Streamwide or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sword Group SE vs. Streamwide
Performance |
| Timeline |
| Sword Group SE |
| Streamwide |
Sword Group and Streamwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sword Group and Streamwide
The main advantage of trading using opposite Sword Group and Streamwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sword Group position performs unexpectedly, Streamwide 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 Streamwide will offset losses from the drop in Streamwide's long position.| Sword Group vs. Linedata Services SA | Sword Group vs. Interparfums SA | Sword Group vs. Esker SA | Sword Group vs. Neurones |
| Streamwide vs. Sartorius Stedim Biotech | Streamwide vs. Lectra SA | Streamwide vs. Teleperformance SE | Streamwide vs. Trigano 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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