Correlation Between Traton SE and Vimian Group
Can any of the company-specific risk be diversified away by investing in both Traton SE and Vimian 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 Traton SE and Vimian Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Traton SE and Vimian Group AB, you can compare the effects of market volatilities on Traton SE and Vimian 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 Traton SE with a short position of Vimian Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Traton SE and Vimian Group.
Diversification Opportunities for Traton SE and Vimian Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Traton and Vimian is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Traton SE and Vimian Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vimian Group 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 Vimian Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vimian Group AB has no effect on the direction of Traton SE i.e., Traton SE and Vimian Group go up and down completely randomly.
Pair Corralation between Traton SE and Vimian Group
Assuming the 90 days trading horizon Traton SE is expected to under-perform the Vimian Group. But the stock apears to be less risky and, when comparing its historical volatility, Traton SE is 1.31 times less risky than Vimian Group. The stock trades about -0.04 of its potential returns per unit of risk. The Vimian Group AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Vimian Group AB on September 3, 2024 and sell it today you would earn a total of 1,385 from holding Vimian Group AB or generate 44.68% 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. Vimian Group AB
Performance |
| Timeline |
| Traton SE |
| Vimian Group AB |
Traton SE and Vimian Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Traton SE and Vimian Group
The main advantage of trading using opposite Traton SE and Vimian Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Traton SE position performs unexpectedly, Vimian 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 Vimian Group will offset losses from the drop in Vimian Group's long position.The idea behind Traton SE and Vimian 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.| Vimian Group vs. ADDvise Group B | Vimian Group vs. Hanza AB | Vimian Group vs. Awardit AB | Vimian Group vs. Doxa 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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