Correlation Between Softwareone Holding and SIG Combibloc

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

By analyzing existing cross correlation between Softwareone Holding and SIG Combibloc Group, you can compare the effects of market volatilities on Softwareone Holding and SIG Combibloc 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 Softwareone Holding with a short position of SIG Combibloc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softwareone Holding and SIG Combibloc.

Diversification Opportunities for Softwareone Holding and SIG Combibloc

-0.02

Correlation Coefficient

Softwareone Holding  SIG Combibloc

Good diversification

The 3 months correlation between Softwareone and SIG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Softwareone Holding and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group and Softwareone Holding 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 Softwareone Holding are associated (or correlated) with SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of Softwareone Holding i.e., Softwareone Holding and SIG Combibloc go up and down completely randomly.

Pair Corralation between Softwareone Holding and SIG Combibloc

Assuming the 90 days trading horizon Softwareone Holding is expected to under-perform the SIG Combibloc. In addition to that, Softwareone Holding is 3.12 times more volatile than SIG Combibloc Group. It trades about -0.16 of its total potential returns per unit of risk. SIG Combibloc Group is currently generating about 0.01 per unit of volatility. If you would invest  1,731  in SIG Combibloc Group on September 4, 2024 and sell it today you would earn a total of  8.00  from holding SIG Combibloc Group or generate 0.46% return on investment over 90 days.

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

Softwareone Holding  vs.  SIG Combibloc Group

Softwareone Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Softwareone Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

SIG Combibloc Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIG Combibloc Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SIG Combibloc is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Softwareone Holding and SIG Combibloc

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

The idea behind Softwareone Holding and SIG Combibloc Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.