Correlation Between Keyware Technologies and Scheerders Van

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

By analyzing existing cross correlation between Keyware Technologies NV and Scheerders van Kerchoves, you can compare the effects of market volatilities on Keyware Technologies and Scheerders Van 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 Keyware Technologies with a short position of Scheerders Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyware Technologies and Scheerders Van.

Diversification Opportunities for Keyware Technologies and Scheerders Van

0.73

Correlation Coefficient

Keyware Technologies  Scheerders Van

Poor diversification

The 3 months correlation between Keyware and Scheerders is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Keyware Technologies NV and Scheerders van Kerchoves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scheerders van Kerchoves and Keyware 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 Keyware Technologies NV are associated (or correlated) with Scheerders Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scheerders van Kerchoves has no effect on the direction of Keyware Technologies i.e., Keyware Technologies and Scheerders Van go up and down completely randomly.

Pair Corralation between Keyware Technologies and Scheerders Van

Assuming the 90 days trading horizon Keyware Technologies is expected to generate 3.41 times less return on investment than Scheerders Van. But when comparing it to its historical volatility, Keyware Technologies NV is 2.33 times less risky than Scheerders Van. It trades about 0.08 of its potential returns per unit of risk. Scheerders van Kerchoves is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  26,000  in Scheerders van Kerchoves on September 14, 2024 and sell it today you would earn a total of  8,600  from holding Scheerders van Kerchoves or generate 33.08% return on investment over 90 days.

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

Keyware Technologies NV  vs.  Scheerders van Kerchoves

Keyware Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Keyware Technologies NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Keyware Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Scheerders van Kerchoves

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scheerders van Kerchoves are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Scheerders Van reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keyware Technologies and Scheerders Van

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

The idea behind Keyware Technologies NV and Scheerders van Kerchoves 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.