Correlation Between INFORMATION SVC and Hyrican Informationssyst

Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC and Hyrican Informationssyst 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 INFORMATION SVC and Hyrican Informationssyst into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INFORMATION SVC GRP and Hyrican Informationssysteme Aktiengesellschaft, you can compare the effects of market volatilities on INFORMATION SVC and Hyrican Informationssyst 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 INFORMATION SVC with a short position of Hyrican Informationssyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and Hyrican Informationssyst.

Diversification Opportunities for INFORMATION SVC and Hyrican Informationssyst

0.51

Correlation Coefficient

INFORMATION SVC  Hyrican Informationssyst

Very weak diversification

The 3 months correlation between INFORMATION and Hyrican is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and Hyrican Informationssysteme Ak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyrican Informationssyst and INFORMATION SVC 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 INFORMATION SVC GRP are associated (or correlated) with Hyrican Informationssyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyrican Informationssyst has no effect on the direction of INFORMATION SVC i.e., INFORMATION SVC and Hyrican Informationssyst go up and down completely randomly.

Pair Corralation between INFORMATION SVC and Hyrican Informationssyst

Assuming the 90 days horizon INFORMATION SVC GRP is expected to under-perform the Hyrican Informationssyst. But the stock apears to be less risky and, when comparing its historical volatility, INFORMATION SVC GRP is 1.03 times less risky than Hyrican Informationssyst. The stock trades about -0.02 of its potential returns per unit of risk. The Hyrican Informationssysteme Aktiengesellschaft is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  403.00  in Hyrican Informationssysteme Aktiengesellschaft on October 20, 2024 and sell it today you would earn a total of  117.00  from holding Hyrican Informationssysteme Aktiengesellschaft or generate 29.03% return on investment over 90 days.

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

INFORMATION SVC GRP  vs.  Hyrican Informationssysteme Ak

INFORMATION SVC GRP

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INFORMATION SVC GRP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INFORMATION SVC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hyrican Informationssyst

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hyrican Informationssysteme Aktiengesellschaft are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Hyrican Informationssyst is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INFORMATION SVC and Hyrican Informationssyst

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

The idea behind INFORMATION SVC GRP and Hyrican Informationssysteme Aktiengesellschaft 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.