Correlation Between Cint Group and Softronic

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

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

Diversification Opportunities for Cint Group and Softronic

0.67

Correlation Coefficient

Cint Group  Softronic

Poor diversification

The 3 months correlation between Cint and Softronic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cint Group AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Cint Group 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 Cint Group AB are associated (or correlated) with Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of Cint Group i.e., Cint Group and Softronic go up and down completely randomly.

Pair Corralation between Cint Group and Softronic

Assuming the 90 days trading horizon Cint Group AB is expected to generate 2.95 times more return on investment than Softronic. However, Cint Group is 2.95 times more volatile than Softronic AB. It trades about 0.09 of its potential returns per unit of risk. Softronic AB is currently generating about 0.08 per unit of risk. If you would invest  1,033  in Cint Group AB on October 6, 2024 and sell it today you would earn a total of  195.00  from holding Cint Group AB or generate 18.88% return on investment over 90 days.

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

Cint Group AB  vs.  Softronic AB

Cint Group AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cint Group AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cint Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Softronic AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Softronic AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Softronic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cint Group and Softronic

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

The idea behind Cint Group AB and Softronic AB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.