Correlation Between SoftwareOne Holding and Hynion AS

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

By analyzing existing cross correlation between SoftwareOne Holding and Hynion AS, you can compare the effects of market volatilities on SoftwareOne Holding and Hynion AS 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 Hynion AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftwareOne Holding and Hynion AS.

Diversification Opportunities for SoftwareOne Holding and Hynion AS

0.63

Correlation Coefficient

SoftwareOne Holding  Hynion AS

Poor diversification

The 3 months correlation between SoftwareOne and Hynion is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SoftwareOne Holding and Hynion AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hynion AS 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 are associated (or correlated) with Hynion AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hynion AS has no effect on the direction of SoftwareOne Holding i.e., SoftwareOne Holding and Hynion AS go up and down completely randomly.

Pair Corralation between SoftwareOne Holding and Hynion AS

Assuming the 90 days trading horizon SoftwareOne Holding is expected to under-perform the Hynion AS. But the stock apears to be less risky and, when comparing its historical volatility, SoftwareOne Holding is 7.14 times less risky than Hynion AS. The stock trades about -0.22 of its potential returns per unit of risk. The Hynion AS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  6.22  in Hynion AS on May 15, 2025 and sell it today you would earn a total of  2.00  from holding Hynion AS or generate 32.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	46.03%
Values	Daily Returns

SoftwareOne Holding  vs.  Hynion AS

SoftwareOne Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days SoftwareOne Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Hynion AS

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Hynion AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Hynion AS disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SoftwareOne Holding and Hynion AS

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

The idea behind SoftwareOne Holding and Hynion AS 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.