Correlation Between SOFTWARE MANSION and Igoria Trade
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Igoria Trade 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 Igoria Trade 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 Igoria Trade SA, you can compare the effects of market volatilities on SOFTWARE MANSION and Igoria Trade 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 Igoria Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Igoria Trade.
Diversification Opportunities for SOFTWARE MANSION and Igoria Trade
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SOFTWARE and Igoria is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Igoria Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Igoria Trade 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 Igoria Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Igoria Trade SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Igoria Trade go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and Igoria Trade
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to generate 0.62 times more return on investment than Igoria Trade. However, SOFTWARE MANSION SPOLKA is 1.61 times less risky than Igoria Trade. It trades about -0.02 of its potential returns per unit of risk. Igoria Trade SA is currently generating about -0.02 per unit of risk. If you would invest 3,250 in SOFTWARE MANSION SPOLKA on September 10, 2024 and sell it today you would lose (130.00) from holding SOFTWARE MANSION SPOLKA or give up 4.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.16% |
Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. Igoria Trade SA
Performance |
Timeline |
SOFTWARE MANSION SPOLKA |
Igoria Trade SA |
SOFTWARE MANSION and Igoria Trade Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SOFTWARE MANSION and Igoria Trade
The main advantage of trading using opposite SOFTWARE MANSION and Igoria Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Igoria Trade 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 Igoria Trade will offset losses from the drop in Igoria Trade's long position.SOFTWARE MANSION vs. Enter Air SA | SOFTWARE MANSION vs. GreenX Metals | SOFTWARE MANSION vs. MCI Management SA | SOFTWARE MANSION vs. Road Studio SA |
Igoria Trade vs. TEN SQUARE GAMES | Igoria Trade vs. UniCredit SpA | Igoria Trade vs. Alior Bank SA | Igoria Trade vs. Immobile |
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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