Correlation Between Fintech SA and SOFTWARE MANSION

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

By analyzing existing cross correlation between Fintech SA and SOFTWARE MANSION SPOLKA, you can compare the effects of market volatilities on Fintech SA and SOFTWARE MANSION 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 Fintech SA with a short position of SOFTWARE MANSION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fintech SA and SOFTWARE MANSION.

Diversification Opportunities for Fintech SA and SOFTWARE MANSION

0.32

Correlation Coefficient

Fintech SA  SOFTWARE MANSION

Weak diversification

The 3 months correlation between Fintech and SOFTWARE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fintech SA and SOFTWARE MANSION SPOLKA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTWARE MANSION SPOLKA and Fintech SA 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 Fintech SA are associated (or correlated) with SOFTWARE MANSION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTWARE MANSION SPOLKA has no effect on the direction of Fintech SA i.e., Fintech SA and SOFTWARE MANSION go up and down completely randomly.

Pair Corralation between Fintech SA and SOFTWARE MANSION

Assuming the 90 days trading horizon Fintech SA is expected to generate 2.62 times less return on investment than SOFTWARE MANSION. In addition to that, Fintech SA is 1.63 times more volatile than SOFTWARE MANSION SPOLKA. It trades about 0.05 of its total potential returns per unit of risk. SOFTWARE MANSION SPOLKA is currently generating about 0.2 per unit of volatility. If you would invest  3,780  in SOFTWARE MANSION SPOLKA on April 23, 2025 and sell it today you would earn a total of  1,320  from holding SOFTWARE MANSION SPOLKA or generate 34.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Fintech SA  vs.  SOFTWARE MANSION SPOLKA

Fintech SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fintech SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fintech SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SOFTWARE MANSION SPOLKA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SOFTWARE MANSION SPOLKA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, SOFTWARE MANSION reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fintech SA and SOFTWARE MANSION

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

The idea behind Fintech SA and SOFTWARE MANSION SPOLKA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.