Correlation Between Vitec Software and Zwipe AS

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

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

Diversification Opportunities for Vitec Software and Zwipe AS

0.14

Correlation Coefficient

Vitec Software  Zwipe AS

Average diversification

The 3 months correlation between Vitec and Zwipe is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and Zwipe AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zwipe AS and Vitec 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 Vitec Software Group are associated (or correlated) with Zwipe AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zwipe AS has no effect on the direction of Vitec Software i.e., Vitec Software and Zwipe AS go up and down completely randomly.

Pair Corralation between Vitec Software and Zwipe AS

Assuming the 90 days trading horizon Vitec Software Group is expected to generate 0.07 times more return on investment than Zwipe AS. However, Vitec Software Group is 13.51 times less risky than Zwipe AS. It trades about 0.01 of its potential returns per unit of risk. Zwipe AS is currently generating about 0.0 per unit of risk. If you would invest  54,329  in Vitec Software Group on December 30, 2024 and sell it today you would earn a total of  171.00  from holding Vitec Software Group or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	77.78%
Values	Daily Returns

Vitec Software Group  vs.  Zwipe AS

Vitec Software Group

Risk-Adjusted Performance

Very Weak

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

Zwipe AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zwipe AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Vitec Software and Zwipe AS

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

The idea behind Vitec Software Group and Zwipe AS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.