Correlation Between OPERA SOFTWARE and SCHALTBAU HOLDING

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

By analyzing existing cross correlation between OPERA SOFTWARE and SCHALTBAU HOLDING, you can compare the effects of market volatilities on OPERA SOFTWARE and SCHALTBAU HOLDING 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 OPERA SOFTWARE with a short position of SCHALTBAU HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and SCHALTBAU HOLDING.

Diversification Opportunities for OPERA SOFTWARE and SCHALTBAU HOLDING

-0.56

Correlation Coefficient

OPERA SOFTWARE  SCHALTBAU HOLDING

Excellent diversification

The 3 months correlation between OPERA and SCHALTBAU is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and SCHALTBAU HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHALTBAU HOLDING and OPERA SOFTWARE 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 OPERA SOFTWARE are associated (or correlated) with SCHALTBAU HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHALTBAU HOLDING has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and SCHALTBAU HOLDING go up and down completely randomly.

Pair Corralation between OPERA SOFTWARE and SCHALTBAU HOLDING

Assuming the 90 days trading horizon OPERA SOFTWARE is expected to under-perform the SCHALTBAU HOLDING. In addition to that, OPERA SOFTWARE is 1.48 times more volatile than SCHALTBAU HOLDING. It trades about -0.04 of its total potential returns per unit of risk. SCHALTBAU HOLDING is currently generating about 0.07 per unit of volatility. If you would invest  5,700  in SCHALTBAU HOLDING on October 4, 2024 and sell it today you would earn a total of  250.00  from holding SCHALTBAU HOLDING or generate 4.39% return on investment over 90 days.

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

OPERA SOFTWARE  vs.  SCHALTBAU HOLDING

OPERA SOFTWARE

Risk-Adjusted Performance

0 of 100

Very Weak

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

SCHALTBAU HOLDING

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCHALTBAU HOLDING are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SCHALTBAU HOLDING is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with OPERA SOFTWARE and SCHALTBAU HOLDING

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

The idea behind OPERA SOFTWARE and SCHALTBAU HOLDING 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.