Correlation Between Exsitec Holding and Softronic

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

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

Diversification Opportunities for Exsitec Holding and Softronic

0.75

Correlation Coefficient

Exsitec Holding  Softronic

Poor diversification

The 3 months correlation between Exsitec and Softronic is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and Softronic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softronic AB and Exsitec Holding 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 Exsitec Holding AB are associated (or correlated) with Softronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softronic AB has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and Softronic go up and down completely randomly.

Pair Corralation between Exsitec Holding and Softronic

Assuming the 90 days trading horizon Exsitec Holding AB is expected to generate 0.99 times more return on investment than Softronic. However, Exsitec Holding AB is 1.01 times less risky than Softronic. It trades about 0.16 of its potential returns per unit of risk. Softronic AB is currently generating about 0.1 per unit of risk. If you would invest  11,529  in Exsitec Holding AB on April 23, 2025 and sell it today you would earn a total of  1,971  from holding Exsitec Holding AB or generate 17.1% return on investment over 90 days.

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

Exsitec Holding AB  vs.  Softronic AB

Exsitec Holding AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exsitec Holding AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Exsitec Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Softronic AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Softronic AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Softronic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Exsitec Holding and Softronic

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

The idea behind Exsitec Holding AB and Softronic AB 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.