Correlation Between DecideAct and Conferize

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

By analyzing existing cross correlation between DecideAct AS and Conferize AS, you can compare the effects of market volatilities on DecideAct and Conferize 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 DecideAct with a short position of Conferize. Check out your portfolio center. Please also check ongoing floating volatility patterns of DecideAct and Conferize.

Diversification Opportunities for DecideAct and Conferize

0.62

Correlation Coefficient

DecideAct  Conferize

Poor diversification

The 3 months correlation between DecideAct and Conferize is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DecideAct AS and Conferize AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conferize AS and DecideAct 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 DecideAct AS are associated (or correlated) with Conferize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conferize AS has no effect on the direction of DecideAct i.e., DecideAct and Conferize go up and down completely randomly.

Pair Corralation between DecideAct and Conferize

Assuming the 90 days trading horizon DecideAct AS is expected to under-perform the Conferize. But the stock apears to be less risky and, when comparing its historical volatility, DecideAct AS is 1.37 times less risky than Conferize. The stock trades about -0.07 of its potential returns per unit of risk. The Conferize AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Conferize AS on September 4, 2024 and sell it today you would lose (0.40) from holding Conferize AS or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

DecideAct AS  vs.  Conferize AS

DecideAct AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DecideAct AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Conferize AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conferize AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DecideAct and Conferize

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

The idea behind DecideAct AS and Conferize AS 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.

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.