Correlation Between FORMPIPE SOFTWARE and SFC Energy

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

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

Diversification Opportunities for FORMPIPE SOFTWARE and SFC Energy

0.36

Correlation Coefficient

FORMPIPE SOFTWARE  SFC Energy

Weak diversification

The 3 months correlation between FORMPIPE and SFC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and SFC Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFC Energy AG and FORMPIPE 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 FORMPIPE SOFTWARE AB are associated (or correlated) with SFC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFC Energy AG has no effect on the direction of FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and SFC Energy go up and down completely randomly.

Pair Corralation between FORMPIPE SOFTWARE and SFC Energy

Assuming the 90 days horizon FORMPIPE SOFTWARE is expected to generate 2.37 times less return on investment than SFC Energy. In addition to that, FORMPIPE SOFTWARE is 1.58 times more volatile than SFC Energy AG. It trades about 0.03 of its total potential returns per unit of risk. SFC Energy AG is currently generating about 0.1 per unit of volatility. If you would invest  1,658  in SFC Energy AG on December 1, 2024 and sell it today you would earn a total of  188.00  from holding SFC Energy AG or generate 11.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

FORMPIPE SOFTWARE AB  vs.  SFC Energy AG

FORMPIPE SOFTWARE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FORMPIPE SOFTWARE AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FORMPIPE SOFTWARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SFC Energy AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SFC Energy AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, SFC Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with FORMPIPE SOFTWARE and SFC Energy

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

The idea behind FORMPIPE SOFTWARE AB and SFC Energy AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.