Correlation Between Easy Software and Baker Hughes

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

By analyzing existing cross correlation between Easy Software AG and Baker Hughes Co, you can compare the effects of market volatilities on Easy Software and Baker Hughes 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 Easy Software with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Baker Hughes.

Diversification Opportunities for Easy Software and Baker Hughes

0.05

Correlation Coefficient

Easy Software  Baker Hughes

Significant diversification

The 3 months correlation between Easy and Baker is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Easy 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 Easy Software AG are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Easy Software i.e., Easy Software and Baker Hughes go up and down completely randomly.

Pair Corralation between Easy Software and Baker Hughes

If you would invest  1,520  in Easy Software AG on October 9, 2024 and sell it today you would earn a total of  280.00  from holding Easy Software AG or generate 18.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Easy Software AG  vs.  Baker Hughes Co

Easy Software AG

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Easy Software AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Easy Software displayed solid returns over the last few months and may actually be approaching a breakup point.

Baker Hughes

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Baker Hughes Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Baker Hughes reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Easy Software and Baker Hughes

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

The idea behind Easy Software AG and Baker Hughes Co 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..