Correlation Between Traton SE and XANO Industri
Can any of the company-specific risk be diversified away by investing in both Traton SE and XANO Industri 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 XANO Industri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Traton SE and XANO Industri AB, you can compare the effects of market volatilities on Traton SE and XANO Industri 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 XANO Industri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Traton SE and XANO Industri.
Diversification Opportunities for Traton SE and XANO Industri
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Traton and XANO is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Traton SE and XANO Industri AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XANO Industri 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 XANO Industri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XANO Industri AB has no effect on the direction of Traton SE i.e., Traton SE and XANO Industri go up and down completely randomly.
Pair Corralation between Traton SE and XANO Industri
Assuming the 90 days trading horizon Traton SE is expected to generate 0.57 times more return on investment than XANO Industri. However, Traton SE is 1.74 times less risky than XANO Industri. It trades about -0.12 of its potential returns per unit of risk. XANO Industri AB is currently generating about -0.27 per unit of risk. If you would invest 35,000 in Traton SE on August 27, 2024 and sell it today you would lose (1,800) from holding Traton SE or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Traton SE vs. XANO Industri AB
Performance |
| Timeline |
| Traton SE |
| XANO Industri AB |
Traton SE and XANO Industri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Traton SE and XANO Industri
The main advantage of trading using opposite Traton SE and XANO Industri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Traton SE position performs unexpectedly, XANO Industri 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 XANO Industri will offset losses from the drop in XANO Industri'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 |
| XANO Industri vs. Troax Group AB | XANO Industri vs. Lagercrantz Group AB | XANO Industri vs. AQ Group AB | XANO Industri vs. OEM International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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