Correlation Between Nemetschek and FANDIFI TECHNOLOGY

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

By analyzing existing cross correlation between Nemetschek AG ON and FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on Nemetschek and FANDIFI TECHNOLOGY 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 Nemetschek with a short position of FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nemetschek and FANDIFI TECHNOLOGY.

Diversification Opportunities for Nemetschek and FANDIFI TECHNOLOGY

0.0

Correlation Coefficient

Nemetschek  FANDIFI TECHNOLOGY

Pay attention - limited upside

The 3 months correlation between Nemetschek and FANDIFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nemetschek AG ON and FANDIFI TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANDIFI TECHNOLOGY and Nemetschek 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 Nemetschek AG ON are associated (or correlated) with FANDIFI TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANDIFI TECHNOLOGY has no effect on the direction of Nemetschek i.e., Nemetschek and FANDIFI TECHNOLOGY go up and down completely randomly.

Pair Corralation between Nemetschek and FANDIFI TECHNOLOGY

Assuming the 90 days trading horizon Nemetschek is expected to generate 11.39 times less return on investment than FANDIFI TECHNOLOGY. But when comparing it to its historical volatility, Nemetschek AG ON is 12.72 times less risky than FANDIFI TECHNOLOGY. It trades about 0.04 of its potential returns per unit of risk. FANDIFI TECHNOLOGY P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.50  in FANDIFI TECHNOLOGY P on September 23, 2024 and sell it today you would lose (0.45) from holding FANDIFI TECHNOLOGY P or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.64%
Values	Daily Returns

Nemetschek AG ON  vs.  FANDIFI TECHNOLOGY P

Nemetschek AG ON

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nemetschek AG ON are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Nemetschek is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nemetschek and FANDIFI TECHNOLOGY

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

The idea behind Nemetschek AG ON and FANDIFI TECHNOLOGY P 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.