Correlation Between Vitec Software and NetJobs Group
Can any of the company-specific risk be diversified away by investing in both Vitec Software and NetJobs Group 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 Vitec Software and NetJobs Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and NetJobs Group AB, you can compare the effects of market volatilities on Vitec Software and NetJobs Group 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 Vitec Software with a short position of NetJobs Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and NetJobs Group.
Diversification Opportunities for Vitec Software and NetJobs Group
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vitec and NetJobs is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and NetJobs Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetJobs Group AB and Vitec Software 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 Vitec Software Group are associated (or correlated) with NetJobs Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetJobs Group AB has no effect on the direction of Vitec Software i.e., Vitec Software and NetJobs Group go up and down completely randomly.
Pair Corralation between Vitec Software and NetJobs Group
Assuming the 90 days trading horizon Vitec Software Group is expected to generate 0.56 times more return on investment than NetJobs Group. However, Vitec Software Group is 1.77 times less risky than NetJobs Group. It trades about 0.0 of its potential returns per unit of risk. NetJobs Group AB is currently generating about -0.05 per unit of risk. If you would invest 48,520 in Vitec Software Group on August 31, 2024 and sell it today you would lose (260.00) from holding Vitec Software Group or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vitec Software Group vs. NetJobs Group AB
Performance |
| Timeline |
| Vitec Software Group |
| NetJobs Group AB |
Vitec Software and NetJobs Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitec Software and NetJobs Group
The main advantage of trading using opposite Vitec Software and NetJobs Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software position performs unexpectedly, NetJobs Group 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 NetJobs Group will offset losses from the drop in NetJobs Group's long position.| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software vs. Instalco Intressenter AB |
| NetJobs Group vs. Samhllsbyggnadsbolaget i Norden | NetJobs Group vs. Sinch AB | NetJobs Group vs. Embracer Group AB | NetJobs Group vs. Evolution AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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