Correlation Between Addnode Group and Vitec Software

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

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

Diversification Opportunities for Addnode Group and Vitec Software

-0.2

Correlation Coefficient

Addnode Group  Vitec Software

Good diversification

The 3 months correlation between Addnode and Vitec is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Addnode Group AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group and Addnode Group 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 Addnode Group AB are associated (or correlated) with Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of Addnode Group i.e., Addnode Group and Vitec Software go up and down completely randomly.

Pair Corralation between Addnode Group and Vitec Software

Assuming the 90 days trading horizon Addnode Group AB is expected to generate 0.95 times more return on investment than Vitec Software. However, Addnode Group AB is 1.05 times less risky than Vitec Software. It trades about 0.11 of its potential returns per unit of risk. Vitec Software Group is currently generating about -0.09 per unit of risk. If you would invest  9,795  in Addnode Group AB on April 23, 2025 and sell it today you would earn a total of  1,805  from holding Addnode Group AB or generate 18.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Addnode Group AB  vs.  Vitec Software Group

Addnode Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Addnode Group AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Addnode Group sustained solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Addnode Group and Vitec Software

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

The idea behind Addnode Group AB and Vitec Software Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.