Correlation Between Exail Technologies and Soditech

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

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

Diversification Opportunities for Exail Technologies and Soditech

0.35

Correlation Coefficient

Exail Technologies  Soditech

Weak diversification

The 3 months correlation between Exail and Soditech is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Exail Technologies SA and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech SA and Exail Technologies 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 Exail Technologies SA are associated (or correlated) with Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Exail Technologies i.e., Exail Technologies and Soditech go up and down completely randomly.

Pair Corralation between Exail Technologies and Soditech

Assuming the 90 days trading horizon Exail Technologies SA is expected to generate 0.73 times more return on investment than Soditech. However, Exail Technologies SA is 1.38 times less risky than Soditech. It trades about -0.1 of its potential returns per unit of risk. Soditech SA is currently generating about -0.31 per unit of risk. If you would invest  1,798  in Exail Technologies SA on September 26, 2024 and sell it today you would lose (76.00) from holding Exail Technologies SA or give up 4.23% of portfolio value over 90 days.

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

Exail Technologies SA  vs.  Soditech SA

Exail Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exail Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exail Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Soditech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soditech SA 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 fundamental 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 Exail Technologies and Soditech

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

The idea behind Exail Technologies SA and Soditech SA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.