Correlation Between Modern Times and Truecaller
Can any of the company-specific risk be diversified away by investing in both Modern Times and Truecaller 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 Modern Times and Truecaller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modern Times Group and Truecaller AB, you can compare the effects of market volatilities on Modern Times and Truecaller 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 Modern Times with a short position of Truecaller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modern Times and Truecaller.
Diversification Opportunities for Modern Times and Truecaller
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Modern and Truecaller is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Modern Times Group and Truecaller AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truecaller AB and Modern Times 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 Modern Times Group are associated (or correlated) with Truecaller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truecaller AB has no effect on the direction of Modern Times i.e., Modern Times and Truecaller go up and down completely randomly.
Pair Corralation between Modern Times and Truecaller
Assuming the 90 days trading horizon Modern Times is expected to generate 3.37 times less return on investment than Truecaller. But when comparing it to its historical volatility, Modern Times Group is 1.71 times less risky than Truecaller. It trades about 0.02 of its potential returns per unit of risk. Truecaller AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,671 in Truecaller AB on August 29, 2024 and sell it today you would earn a total of 1,103 from holding Truecaller AB or generate 30.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modern Times Group vs. Truecaller AB
Performance |
| Timeline |
| Modern Times Group |
| Truecaller AB |
Modern Times and Truecaller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modern Times and Truecaller
The main advantage of trading using opposite Modern Times and Truecaller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modern Times position performs unexpectedly, Truecaller 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 Truecaller will offset losses from the drop in Truecaller's long position.| Modern Times vs. Kinnevik Investment AB | Modern Times vs. Tele2 AB | Modern Times vs. Getinge AB ser | Modern Times vs. Securitas AB |
| Truecaller vs. Sinch AB | Truecaller vs. Hexatronic Group AB | Truecaller vs. Samhllsbyggnadsbolaget i Norden | Truecaller vs. Storskogen Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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