Correlation Between OPERA SOFTWARE and PSI Software

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

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

Diversification Opportunities for OPERA SOFTWARE and PSI Software

0.5

Correlation Coefficient

OPERA SOFTWARE  PSI Software

Very weak diversification

The 3 months correlation between OPERA and PSI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and PSI Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI Software AG and OPERA 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 OPERA SOFTWARE are associated (or correlated) with PSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI Software AG has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and PSI Software go up and down completely randomly.

Pair Corralation between OPERA SOFTWARE and PSI Software

Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 1.07 times more return on investment than PSI Software. However, OPERA SOFTWARE is 1.07 times more volatile than PSI Software AG. It trades about 0.32 of its potential returns per unit of risk. PSI Software AG is currently generating about 0.13 per unit of risk. If you would invest  72.00  in OPERA SOFTWARE on April 20, 2025 and sell it today you would earn a total of  40.00  from holding OPERA SOFTWARE or generate 55.56% return on investment over 90 days.

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

OPERA SOFTWARE  vs.  PSI Software AG

OPERA SOFTWARE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OPERA SOFTWARE are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, OPERA SOFTWARE unveiled solid returns over the last few months and may actually be approaching a breakup point.

PSI Software AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PSI Software AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, PSI Software exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OPERA SOFTWARE and PSI Software

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

The idea behind OPERA SOFTWARE and PSI Software AG 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.