Correlation Between GomSpace Group and Troax Group
Can any of the company-specific risk be diversified away by investing in both GomSpace Group and Troax 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 GomSpace Group and Troax Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GomSpace Group AB and Troax Group AB, you can compare the effects of market volatilities on GomSpace Group and Troax 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 GomSpace Group with a short position of Troax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GomSpace Group and Troax Group.
Diversification Opportunities for GomSpace Group and Troax Group
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GomSpace and Troax is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GomSpace Group AB and Troax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troax Group AB and GomSpace 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 GomSpace Group AB are associated (or correlated) with Troax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troax Group AB has no effect on the direction of GomSpace Group i.e., GomSpace Group and Troax Group go up and down completely randomly.
Pair Corralation between GomSpace Group and Troax Group
Assuming the 90 days trading horizon GomSpace Group AB is expected to generate 1.71 times more return on investment than Troax Group. However, GomSpace Group is 1.71 times more volatile than Troax Group AB. It trades about 0.04 of its potential returns per unit of risk. Troax Group AB is currently generating about -0.01 per unit of risk. If you would invest 440.00 in GomSpace Group AB on August 30, 2024 and sell it today you would earn a total of 17.00 from holding GomSpace Group AB or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GomSpace Group AB vs. Troax Group AB
Performance |
| Timeline |
| GomSpace Group AB |
| Troax Group AB |
GomSpace Group and Troax Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GomSpace Group and Troax Group
The main advantage of trading using opposite GomSpace Group and Troax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GomSpace Group position performs unexpectedly, Troax 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 Troax Group will offset losses from the drop in Troax Group's long position.| GomSpace Group vs. Troax Group AB | GomSpace Group vs. NIBE Industrier AB | GomSpace Group vs. Hexatronic Group AB | GomSpace Group vs. Bufab Holding AB |
| Troax Group vs. NIBE Industrier AB | Troax Group vs. Hexatronic Group AB | Troax Group vs. Bufab Holding AB | Troax Group vs. MIPS 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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