Correlation Between Software Aktiengesellscha and WESTFIELD RETAIL

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

By analyzing existing cross correlation between Software Aktiengesellschaft and WESTFIELD RETAIL TR, you can compare the effects of market volatilities on Software Aktiengesellscha and WESTFIELD RETAIL 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 Aktiengesellscha with a short position of WESTFIELD RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Software Aktiengesellscha and WESTFIELD RETAIL.

Diversification Opportunities for Software Aktiengesellscha and WESTFIELD RETAIL

0.0

Correlation Coefficient

Software Aktiengesellscha  WESTFIELD RETAIL

Pay attention - limited upside

The 3 months correlation between Software and WESTFIELD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Software Aktiengesellschaft and WESTFIELD RETAIL TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTFIELD RETAIL and Software Aktiengesellscha 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 Aktiengesellschaft are associated (or correlated) with WESTFIELD RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTFIELD RETAIL has no effect on the direction of Software Aktiengesellscha i.e., Software Aktiengesellscha and WESTFIELD RETAIL go up and down completely randomly.

Pair Corralation between Software Aktiengesellscha and WESTFIELD RETAIL

If you would invest  3,741  in Software Aktiengesellschaft on March 5, 2024 and sell it today you would earn a total of  5.00  from holding Software Aktiengesellschaft or generate 0.13% return on investment over 90 days.

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

Software Aktiengesellschaft  vs.  WESTFIELD RETAIL TR

Software Aktiengesellscha

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Software Aktiengesellschaft are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Software Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WESTFIELD RETAIL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESTFIELD RETAIL TR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WESTFIELD RETAIL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Software Aktiengesellscha and WESTFIELD RETAIL

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

The idea behind Software Aktiengesellschaft and WESTFIELD RETAIL TR 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.