Correlation Between FOM Technologies and Trifork Holding
Can any of the company-specific risk be diversified away by investing in both FOM Technologies and Trifork Holding 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 FOM Technologies and Trifork Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOM Technologies AS and Trifork Holding AG, you can compare the effects of market volatilities on FOM Technologies and Trifork Holding 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 FOM Technologies with a short position of Trifork Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and Trifork Holding.
Diversification Opportunities for FOM Technologies and Trifork Holding
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FOM and Trifork is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and Trifork Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trifork Holding AG and FOM Technologies 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 FOM Technologies AS are associated (or correlated) with Trifork Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trifork Holding AG has no effect on the direction of FOM Technologies i.e., FOM Technologies and Trifork Holding go up and down completely randomly.
Pair Corralation between FOM Technologies and Trifork Holding
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the Trifork Holding. In addition to that, FOM Technologies is 1.8 times more volatile than Trifork Holding AG. It trades about -0.09 of its total potential returns per unit of risk. Trifork Holding AG is currently generating about -0.05 per unit of volatility. If you would invest 10,600 in Trifork Holding AG on August 29, 2024 and sell it today you would lose (2,890) from holding Trifork Holding AG or give up 27.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. Trifork Holding AG
Performance |
| Timeline |
| FOM Technologies |
| Trifork Holding AG |
FOM Technologies and Trifork Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and Trifork Holding
The main advantage of trading using opposite FOM Technologies and Trifork Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, Trifork Holding 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 Trifork Holding will offset losses from the drop in Trifork Holding's long position.| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell AS |
| Trifork Holding vs. Netcompany Group AS | Trifork Holding vs. cBrain AS | Trifork Holding vs. ALK Abell AS | Trifork Holding vs. Green Hydrogen Systems |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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