Correlation Between PUMA SE and Easy Software

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

By analyzing existing cross correlation between PUMA SE and Easy Software AG, you can compare the effects of market volatilities on PUMA SE and Easy Software 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 PUMA SE with a short position of Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUMA SE and Easy Software.

Diversification Opportunities for PUMA SE and Easy Software

-0.17

Correlation Coefficient

PUMA SE  Easy Software

Good diversification

The 3 months correlation between PUMA and Easy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PUMA SE and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG and PUMA SE 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 PUMA SE are associated (or correlated) with Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of PUMA SE i.e., PUMA SE and Easy Software go up and down completely randomly.

Pair Corralation between PUMA SE and Easy Software

Assuming the 90 days horizon PUMA SE is expected to under-perform the Easy Software. But the stock apears to be less risky and, when comparing its historical volatility, PUMA SE is 2.13 times less risky than Easy Software. The stock trades about -0.46 of its potential returns per unit of risk. The Easy Software AG is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,860  in Easy Software AG on October 24, 2024 and sell it today you would lose (60.00) from holding Easy Software AG or give up 3.23% of portfolio value over 90 days.

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

PUMA SE  vs.  Easy Software AG

PUMA SE

Risk-Adjusted Performance

1 of 100

Weak

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

Easy Software AG

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Easy Software AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Easy Software displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PUMA SE and Easy Software

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

The idea behind PUMA SE and Easy Software AG 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..