Correlation Between SoftwareONE Holding and SF Urban

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

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

Diversification Opportunities for SoftwareONE Holding and SF Urban

0.86

Correlation Coefficient

SoftwareONE Holding  SF Urban

Very poor diversification

The 3 months correlation between SoftwareONE and SFPN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SoftwareONE Holding AG and SF Urban Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SF Urban Properties and SoftwareONE 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 SoftwareONE Holding AG are associated (or correlated) with SF Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SF Urban Properties has no effect on the direction of SoftwareONE Holding i.e., SoftwareONE Holding and SF Urban go up and down completely randomly.

Pair Corralation between SoftwareONE Holding and SF Urban

Assuming the 90 days trading horizon SoftwareONE Holding AG is expected to generate 5.86 times more return on investment than SF Urban. However, SoftwareONE Holding is 5.86 times more volatile than SF Urban Properties. It trades about 0.18 of its potential returns per unit of risk. SF Urban Properties is currently generating about 0.14 per unit of risk. If you would invest  499.00  in SoftwareONE Holding AG on April 22, 2025 and sell it today you would earn a total of  194.00  from holding SoftwareONE Holding AG or generate 38.88% return on investment over 90 days.

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

SoftwareONE Holding AG  vs.  SF Urban Properties

SoftwareONE Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SoftwareONE Holding AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, SoftwareONE Holding showed solid returns over the last few months and may actually be approaching a breakup point.

SF Urban Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SF Urban Properties are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SF Urban is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SoftwareONE Holding and SF Urban

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

The idea behind SoftwareONE Holding AG and SF Urban Properties 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.