Correlation Between Serstech and TalkPool
Can any of the company-specific risk be diversified away by investing in both Serstech and TalkPool 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 Serstech and TalkPool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Serstech AB and TalkPool AG, you can compare the effects of market volatilities on Serstech and TalkPool 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 Serstech with a short position of TalkPool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Serstech and TalkPool.
Diversification Opportunities for Serstech and TalkPool
Average diversification
The 3 months correlation between Serstech and TalkPool is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Serstech AB and TalkPool AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TalkPool AG and Serstech 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 Serstech AB are associated (or correlated) with TalkPool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TalkPool AG has no effect on the direction of Serstech i.e., Serstech and TalkPool go up and down completely randomly.
Pair Corralation between Serstech and TalkPool
Assuming the 90 days trading horizon Serstech AB is expected to generate 1.67 times more return on investment than TalkPool. However, Serstech is 1.67 times more volatile than TalkPool AG. It trades about 0.12 of its potential returns per unit of risk. TalkPool AG is currently generating about -0.14 per unit of risk. If you would invest 103.00 in Serstech AB on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Serstech AB or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Serstech AB vs. TalkPool AG
Performance |
| Timeline |
| Serstech AB |
| TalkPool AG |
Serstech and TalkPool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Serstech and TalkPool
The main advantage of trading using opposite Serstech and TalkPool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serstech position performs unexpectedly, TalkPool 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 TalkPool will offset losses from the drop in TalkPool's long position.| Serstech vs. Enzymatica publ AB | Serstech vs. Polygiene AB | Serstech vs. Sprint Bioscience AB | Serstech vs. XMReality AB |
| TalkPool vs. Embracer Group AB | TalkPool vs. Samhllsbyggnadsbolaget i Norden | TalkPool vs. Evolution AB | TalkPool vs. Stillfront 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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