Correlation Between Traton SE and Clean Motion
Can any of the company-specific risk be diversified away by investing in both Traton SE and Clean Motion 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 Traton SE and Clean Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Traton SE and Clean Motion AB, you can compare the effects of market volatilities on Traton SE and Clean Motion 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 Traton SE with a short position of Clean Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Traton SE and Clean Motion.
Diversification Opportunities for Traton SE and Clean Motion
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Traton and Clean is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Traton SE and Clean Motion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Motion AB and Traton SE 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 Traton SE are associated (or correlated) with Clean Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Motion AB has no effect on the direction of Traton SE i.e., Traton SE and Clean Motion go up and down completely randomly.
Pair Corralation between Traton SE and Clean Motion
Assuming the 90 days trading horizon Traton SE is expected to generate 0.3 times more return on investment than Clean Motion. However, Traton SE is 3.34 times less risky than Clean Motion. It trades about 0.09 of its potential returns per unit of risk. Clean Motion AB is currently generating about -0.01 per unit of risk. If you would invest 15,754 in Traton SE on August 28, 2024 and sell it today you would earn a total of 17,446 from holding Traton SE or generate 110.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Traton SE vs. Clean Motion AB
Performance |
| Timeline |
| Traton SE |
| Clean Motion AB |
Traton SE and Clean Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Traton SE and Clean Motion
The main advantage of trading using opposite Traton SE and Clean Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Traton SE position performs unexpectedly, Clean Motion 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 Clean Motion will offset losses from the drop in Clean Motion's long position.| Traton SE vs. Volvo Car AB | Traton SE vs. KABE Group AB | Traton SE vs. IAR Systems Group | Traton SE vs. Norva24 Group AB |
| Clean Motion vs. Volvo Car AB | Clean Motion vs. KABE Group AB | Clean Motion vs. IAR Systems Group | Clean Motion vs. Norva24 Group AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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