Correlation Between Clean Motion and Traton SE
Can any of the company-specific risk be diversified away by investing in both Clean Motion and Traton SE 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 Clean Motion and Traton SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Motion AB and Traton SE, you can compare the effects of market volatilities on Clean Motion and Traton SE 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 Clean Motion with a short position of Traton SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Motion and Traton SE.
Diversification Opportunities for Clean Motion and Traton SE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clean and Traton is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Traton SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traton SE and Clean Motion 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 Clean Motion AB are associated (or correlated) with Traton SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traton SE has no effect on the direction of Clean Motion i.e., Clean Motion and Traton SE go up and down completely randomly.
Pair Corralation between Clean Motion and Traton SE
Assuming the 90 days trading horizon Clean Motion AB is expected to under-perform the Traton SE. In addition to that, Clean Motion is 2.34 times more volatile than Traton SE. It trades about -0.33 of its total potential returns per unit of risk. Traton SE is currently generating about -0.05 per unit of volatility. If you would invest 34,100 in Traton SE on September 4, 2024 and sell it today you would lose (900.00) from holding Traton SE or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Motion AB vs. Traton SE
Performance |
| Timeline |
| Clean Motion AB |
| Traton SE |
Clean Motion and Traton SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Motion and Traton SE
The main advantage of trading using opposite Clean Motion and Traton SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Motion position performs unexpectedly, Traton SE 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 Traton SE will offset losses from the drop in Traton SE's long position.| Clean Motion vs. Traton SE | Clean Motion vs. KABE Group AB | Clean Motion vs. IAR Systems Group | Clean Motion vs. Mekonomen 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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