Correlation Between SOFTWARE MANSION and Vee SA

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Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and Vee SA 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 SOFTWARE MANSION and Vee SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTWARE MANSION SPOLKA and Vee SA, you can compare the effects of market volatilities on SOFTWARE MANSION and Vee SA 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 SOFTWARE MANSION with a short position of Vee SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and Vee SA.

Diversification Opportunities for SOFTWARE MANSION and Vee SA

SOFTWAREVeeDiversified AwaySOFTWAREVeeDiversified Away100%
0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between SOFTWARE and Vee is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Vee SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vee SA and SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA are associated (or correlated) with Vee SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vee SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Vee SA go up and down completely randomly.

Pair Corralation between SOFTWARE MANSION and Vee SA

Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to generate 0.7 times more return on investment than Vee SA. However, SOFTWARE MANSION SPOLKA is 1.43 times less risky than Vee SA. It trades about 0.03 of its potential returns per unit of risk. Vee SA is currently generating about 0.01 per unit of risk. If you would invest  2,896  in SOFTWARE MANSION SPOLKA on November 21, 2024 and sell it today you would earn a total of  404.00  from holding SOFTWARE MANSION SPOLKA or generate 13.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy62.6%
ValuesDaily Returns

SOFTWARE MANSION SPOLKA  vs.  Vee SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-100
JavaScript chart by amCharts 3.21.15SWM VEE
       Timeline  
SOFTWARE MANSION SPOLKA 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SOFTWARE MANSION SPOLKA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, SOFTWARE MANSION reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb27282930313233
Vee SA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Vee SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vee SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb910111213141516

SOFTWARE MANSION and Vee SA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.87-2.9-1.93-0.96-0.01620.911.872.833.794.76 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15SWM VEE
       Returns  

Pair Trading with SOFTWARE MANSION and Vee SA

The main advantage of trading using opposite SOFTWARE MANSION and Vee SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, Vee SA 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 Vee SA will offset losses from the drop in Vee SA's long position.
The idea behind SOFTWARE MANSION SPOLKA and Vee SA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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