Correlation Between Information Services and Ströer SE

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

By analyzing existing cross correlation between Information Services International Dentsu and Strer SE Co, you can compare the effects of market volatilities on Information Services and Ströer SE 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 Information Services with a short position of Ströer SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Ströer SE.

Diversification Opportunities for Information Services and Ströer SE

-0.38

Correlation Coefficient

Information Services  Ströer SE

Very good diversification

The 3 months correlation between Information and Ströer is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Internati and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ströer SE and Information Services 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 Information Services International Dentsu are associated (or correlated) with Ströer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ströer SE has no effect on the direction of Information Services i.e., Information Services and Ströer SE go up and down completely randomly.

Pair Corralation between Information Services and Ströer SE

Assuming the 90 days horizon Information Services International Dentsu is expected to under-perform the Ströer SE. But the stock apears to be less risky and, when comparing its historical volatility, Information Services International Dentsu is 3.09 times less risky than Ströer SE. The stock trades about -0.14 of its potential returns per unit of risk. The Strer SE Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,624  in Strer SE Co on October 24, 2024 and sell it today you would earn a total of  791.00  from holding Strer SE Co or generate 17.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Information Services Internati  vs.  Strer SE Co

Information Services

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services International Dentsu are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Information Services may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ströer SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strer SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ströer SE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Information Services and Ströer SE

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

The idea behind Information Services International Dentsu and Strer SE 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.