Correlation Between SPORT LISBOA and SOEDER SPORTFISKE

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

By analyzing existing cross correlation between SPORT LISBOA E and SOEDER SPORTFISKE AB, you can compare the effects of market volatilities on SPORT LISBOA and SOEDER SPORTFISKE 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 SPORT LISBOA with a short position of SOEDER SPORTFISKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and SOEDER SPORTFISKE.

Diversification Opportunities for SPORT LISBOA and SOEDER SPORTFISKE

0.09

Correlation Coefficient

SPORT LISBOA  SOEDER SPORTFISKE

Significant diversification

The 3 months correlation between SPORT and SOEDER is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and SOEDER SPORTFISKE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOEDER SPORTFISKE and SPORT LISBOA 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 SPORT LISBOA E are associated (or correlated) with SOEDER SPORTFISKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOEDER SPORTFISKE has no effect on the direction of SPORT LISBOA i.e., SPORT LISBOA and SOEDER SPORTFISKE go up and down completely randomly.

Pair Corralation between SPORT LISBOA and SOEDER SPORTFISKE

Assuming the 90 days horizon SPORT LISBOA is expected to generate 6.2 times less return on investment than SOEDER SPORTFISKE. In addition to that, SPORT LISBOA is 1.14 times more volatile than SOEDER SPORTFISKE AB. It trades about 0.02 of its total potential returns per unit of risk. SOEDER SPORTFISKE AB is currently generating about 0.13 per unit of volatility. If you would invest  209.00  in SOEDER SPORTFISKE AB on December 21, 2024 and sell it today you would earn a total of  50.00  from holding SOEDER SPORTFISKE AB or generate 23.92% return on investment over 90 days.

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

SPORT LISBOA E  vs.  SOEDER SPORTFISKE AB

SPORT LISBOA E

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPORT LISBOA E are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SPORT LISBOA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SOEDER SPORTFISKE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOEDER SPORTFISKE AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SOEDER SPORTFISKE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPORT LISBOA and SOEDER SPORTFISKE

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

The idea behind SPORT LISBOA E and SOEDER SPORTFISKE AB 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.