Correlation Between TeamViewer and Elmo Software

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

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

Diversification Opportunities for TeamViewer and Elmo Software

0.05

Correlation Coefficient

TeamViewer  Elmo Software

Significant diversification

The 3 months correlation between TeamViewer and Elmo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TeamViewer AG and Elmo Software Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmo Software Limited and TeamViewer 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 TeamViewer AG are associated (or correlated) with Elmo Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmo Software Limited has no effect on the direction of TeamViewer i.e., TeamViewer and Elmo Software go up and down completely randomly.

Pair Corralation between TeamViewer and Elmo Software

If you would invest  335.00  in Elmo Software Limited on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Elmo Software Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

TeamViewer AG  vs.  Elmo Software Limited

TeamViewer AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TeamViewer AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TeamViewer is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Elmo Software Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elmo Software Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Elmo Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TeamViewer and Elmo Software

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

The idea behind TeamViewer AG and Elmo Software Limited 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.