Correlation Between Upsales Technology and Netel Holding
Can any of the company-specific risk be diversified away by investing in both Upsales Technology and Netel Holding 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 Upsales Technology and Netel Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upsales Technology AB and Netel Holding AB, you can compare the effects of market volatilities on Upsales Technology and Netel Holding 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 Upsales Technology with a short position of Netel Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upsales Technology and Netel Holding.
Diversification Opportunities for Upsales Technology and Netel Holding
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Upsales and Netel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Netel Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netel Holding AB and Upsales Technology 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 Upsales Technology AB are associated (or correlated) with Netel Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netel Holding AB has no effect on the direction of Upsales Technology i.e., Upsales Technology and Netel Holding go up and down completely randomly.
Pair Corralation between Upsales Technology and Netel Holding
Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 1.16 times more return on investment than Netel Holding. However, Upsales Technology is 1.16 times more volatile than Netel Holding AB. It trades about -0.13 of its potential returns per unit of risk. Netel Holding AB is currently generating about -0.53 per unit of risk. If you would invest 3,300 in Upsales Technology AB on August 28, 2024 and sell it today you would lose (260.00) from holding Upsales Technology AB or give up 7.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upsales Technology AB vs. Netel Holding AB
Performance |
| Timeline |
| Upsales Technology |
| Netel Holding AB |
Upsales Technology and Netel Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upsales Technology and Netel Holding
The main advantage of trading using opposite Upsales Technology and Netel Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upsales Technology position performs unexpectedly, Netel Holding 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 Netel Holding will offset losses from the drop in Netel Holding's long position.| Upsales Technology vs. Lime Technologies AB | Upsales Technology vs. FormPipe Software AB | Upsales Technology vs. Surgical Science Sweden | Upsales Technology vs. Vitec Software Group |
| Netel Holding vs. NCAB Group | Netel Holding vs. Nordisk Bergteknik AB | Netel Holding vs. Ctek AB | Netel Holding vs. Nordic Waterproofing Holding |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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