Correlation Between EWork Group and Transtema Group
Can any of the company-specific risk be diversified away by investing in both EWork Group and Transtema 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 EWork Group and Transtema Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eWork Group AB and Transtema Group AB, you can compare the effects of market volatilities on EWork Group and Transtema 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 EWork Group with a short position of Transtema Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of EWork Group and Transtema Group.
Diversification Opportunities for EWork Group and Transtema Group
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between EWork and Transtema is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding eWork Group AB and Transtema Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transtema Group AB and EWork Group 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 eWork Group AB are associated (or correlated) with Transtema Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transtema Group AB has no effect on the direction of EWork Group i.e., EWork Group and Transtema Group go up and down completely randomly.
Pair Corralation between EWork Group and Transtema Group
Assuming the 90 days trading horizon EWork Group is expected to generate 4.82 times less return on investment than Transtema Group. But when comparing it to its historical volatility, eWork Group AB is 1.76 times less risky than Transtema Group. It trades about 0.02 of its potential returns per unit of risk. Transtema Group AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Transtema Group AB on September 1, 2024 and sell it today you would earn a total of 310.00 from holding Transtema Group AB or generate 23.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
eWork Group AB vs. Transtema Group AB
Performance |
| Timeline |
| eWork Group AB |
| Transtema Group AB |
EWork Group and Transtema Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EWork Group and Transtema Group
The main advantage of trading using opposite EWork Group and Transtema Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EWork Group position performs unexpectedly, Transtema 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 Transtema Group will offset losses from the drop in Transtema Group's long position.| EWork Group vs. Softronic AB | EWork Group vs. Proact IT Group | EWork Group vs. Inwido AB | EWork Group vs. NOTE AB |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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