Correlation Between FORMPIPE SOFTWARE and Collins Foods

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

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

Diversification Opportunities for FORMPIPE SOFTWARE and Collins Foods

0.21

Correlation Coefficient

FORMPIPE SOFTWARE  Collins Foods

Modest diversification

The 3 months correlation between FORMPIPE and Collins is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and Collins Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods Limited and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB are associated (or correlated) with Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods Limited has no effect on the direction of FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and Collins Foods go up and down completely randomly.

Pair Corralation between FORMPIPE SOFTWARE and Collins Foods

Assuming the 90 days horizon FORMPIPE SOFTWARE is expected to generate 1.91 times less return on investment than Collins Foods. But when comparing it to its historical volatility, FORMPIPE SOFTWARE AB is 1.14 times less risky than Collins Foods. It trades about 0.05 of its potential returns per unit of risk. Collins Foods Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  446.00  in Collins Foods Limited on April 25, 2025 and sell it today you would earn a total of  64.00  from holding Collins Foods Limited or generate 14.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FORMPIPE SOFTWARE AB  vs.  Collins Foods Limited

FORMPIPE SOFTWARE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FORMPIPE SOFTWARE AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FORMPIPE SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Collins Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FORMPIPE SOFTWARE and Collins Foods

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

The idea behind FORMPIPE SOFTWARE AB and Collins Foods 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.