Correlation Between SOFTWARE MANSION and Immobile

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

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

Diversification Opportunities for SOFTWARE MANSION and Immobile

0.88

Correlation Coefficient

SOFTWARE MANSION  Immobile

Very poor diversification

The 3 months correlation between SOFTWARE and Immobile is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and Immobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobile and SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA are associated (or correlated) with Immobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobile has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and Immobile go up and down completely randomly.

Pair Corralation between SOFTWARE MANSION and Immobile

Assuming the 90 days trading horizon SOFTWARE MANSION is expected to generate 1.82 times less return on investment than Immobile. But when comparing it to its historical volatility, SOFTWARE MANSION SPOLKA is 1.36 times less risky than Immobile. It trades about 0.2 of its potential returns per unit of risk. Immobile is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  209.00  in Immobile on April 25, 2025 and sell it today you would earn a total of  153.00  from holding Immobile or generate 73.21% return on investment over 90 days.

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

SOFTWARE MANSION SPOLKA  vs.  Immobile

SOFTWARE MANSION SPOLKA

Risk-Adjusted Performance

Solid

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.

Immobile

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Immobile are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Immobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOFTWARE MANSION and Immobile

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

The idea behind SOFTWARE MANSION SPOLKA and Immobile 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.