Correlation Between FormPipe Software and Refine Group

Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Refine Group 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 Refine Group 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 Refine Group AB, you can compare the effects of market volatilities on FormPipe Software and Refine Group 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 Refine Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Refine Group.

Diversification Opportunities for FormPipe Software and Refine Group

0.4

Correlation Coefficient

FormPipe Software  Refine Group

Very weak diversification

The 3 months correlation between FormPipe and Refine is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Refine Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refine Group AB 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 Refine Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refine Group AB has no effect on the direction of FormPipe Software i.e., FormPipe Software and Refine Group go up and down completely randomly.

Pair Corralation between FormPipe Software and Refine Group

Assuming the 90 days trading horizon FormPipe Software is expected to generate 8.42 times less return on investment than Refine Group. But when comparing it to its historical volatility, FormPipe Software AB is 5.71 times less risky than Refine Group. It trades about 0.03 of its potential returns per unit of risk. Refine Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Refine Group AB on May 15, 2025 and sell it today you would earn a total of  0.00  from holding Refine Group AB or generate 0.0% return on investment over 90 days.

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

FormPipe Software AB  vs.  Refine Group AB

FormPipe Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FormPipe Software AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, FormPipe Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Refine Group AB

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Refine Group AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Refine Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FormPipe Software and Refine Group

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

The idea behind FormPipe Software AB and Refine Group AB 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.