Correlation Between FormPipe Software and Maven Wireless

Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Maven Wireless 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 FormPipe Software and Maven Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FormPipe Software AB and Maven Wireless Sweden, you can compare the effects of market volatilities on FormPipe Software and Maven Wireless 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 FormPipe Software with a short position of Maven Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Maven Wireless.

Diversification Opportunities for FormPipe Software and Maven Wireless

0.23

Correlation Coefficient

FormPipe Software  Maven Wireless

Modest diversification

The 3 months correlation between FormPipe and Maven is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden and FormPipe 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 FormPipe Software AB are associated (or correlated) with Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of FormPipe Software i.e., FormPipe Software and Maven Wireless go up and down completely randomly.

Pair Corralation between FormPipe Software and Maven Wireless

Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 0.73 times more return on investment than Maven Wireless. However, FormPipe Software AB is 1.37 times less risky than Maven Wireless. It trades about -0.05 of its potential returns per unit of risk. Maven Wireless Sweden is currently generating about -0.09 per unit of risk. If you would invest  2,634  in FormPipe Software AB on September 12, 2024 and sell it today you would lose (234.00) from holding FormPipe Software AB or give up 8.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FormPipe Software AB  vs.  Maven Wireless Sweden

FormPipe Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FormPipe Software AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Maven Wireless Sweden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maven Wireless Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FormPipe Software and Maven Wireless

The main advantage of trading using opposite FormPipe Software and Maven Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Maven Wireless 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 Maven Wireless will offset losses from the drop in Maven Wireless' long position.

The idea behind FormPipe Software AB and Maven Wireless Sweden pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.