Correlation Between Patterson Companies and SOEDER SPORTFISKE

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

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

Diversification Opportunities for Patterson Companies and SOEDER SPORTFISKE

-0.3

Correlation Coefficient

Patterson Companies  SOEDER SPORTFISKE

Very good diversification

The 3 months correlation between Patterson and SOEDER is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Patterson Companies and SOEDER SPORTFISKE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOEDER SPORTFISKE and Patterson Companies 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 Patterson Companies 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 Patterson Companies i.e., Patterson Companies and SOEDER SPORTFISKE go up and down completely randomly.

Pair Corralation between Patterson Companies and SOEDER SPORTFISKE

Assuming the 90 days trading horizon Patterson Companies is expected to under-perform the SOEDER SPORTFISKE. But the stock apears to be less risky and, when comparing its historical volatility, Patterson Companies is 5.52 times less risky than SOEDER SPORTFISKE. The stock trades about -0.09 of its potential returns per unit of risk. The SOEDER SPORTFISKE AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. 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 Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Patterson Companies  vs.  SOEDER SPORTFISKE AB

Patterson Companies

Risk-Adjusted Performance

Very Weak

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

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 fragile basic indicators, SOEDER SPORTFISKE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Patterson Companies and SOEDER SPORTFISKE

The main advantage of trading using opposite Patterson Companies and SOEDER SPORTFISKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson Companies 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 Patterson Companies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.