Correlation Between Conferize and Scape Technologies

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

Diversification Opportunities for Conferize and Scape Technologies

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Conferize and Scape is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Conferize AS and Scape Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scape Technologies and Conferize 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 Conferize AS are associated (or correlated) with Scape Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scape Technologies has no effect on the direction of Conferize i.e., Conferize and Scape Technologies go up and down completely randomly.

Pair Corralation between Conferize and Scape Technologies

Assuming the 90 days trading horizon Conferize AS is expected to under-perform the Scape Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Conferize AS is 1.04 times less risky than Scape Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Scape Technologies AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Scape Technologies AS on December 29, 2023 and sell it today you would lose (84.00) from holding Scape Technologies AS or give up 54.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.79%
ValuesDaily Returns

Conferize AS  vs.  Scape Technologies AS

 Performance 
       Timeline  
Conferize AS 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Conferize AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Conferize sustained solid returns over the last few months and may actually be approaching a breakup point.
Scape Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Scape Technologies AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Conferize and Scape Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Conferize and Scape Technologies

The main advantage of trading using opposite Conferize and Scape Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conferize position performs unexpectedly, Scape Technologies 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 Scape Technologies will offset losses from the drop in Scape Technologies' long position.
The idea behind Conferize AS and Scape Technologies 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.
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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