Correlation Between Montea CVA and Keyware Technologies

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

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

Diversification Opportunities for Montea CVA and Keyware Technologies

-0.67

Correlation Coefficient

Montea CVA  Keyware Technologies

Excellent diversification

The 3 months correlation between Montea and Keyware is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Montea CVA and Keyware Technologies NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyware Technologies and Montea CVA 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 Montea CVA are associated (or correlated) with Keyware Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyware Technologies has no effect on the direction of Montea CVA i.e., Montea CVA and Keyware Technologies go up and down completely randomly.

Pair Corralation between Montea CVA and Keyware Technologies

Assuming the 90 days trading horizon Montea CVA is expected to under-perform the Keyware Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Montea CVA is 1.65 times less risky than Keyware Technologies. The stock trades about -0.22 of its potential returns per unit of risk. The Keyware Technologies NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Keyware Technologies NV on September 15, 2024 and sell it today you would earn a total of  7.00  from holding Keyware Technologies NV or generate 9.72% return on investment over 90 days.

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

Montea CVA  vs.  Keyware Technologies NV

Montea CVA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Montea CVA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Montea CVA and Keyware Technologies

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

The idea behind Montea CVA and Keyware Technologies NV 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.