Correlation Between TalkPool and Fagerhult
Can any of the company-specific risk be diversified away by investing in both TalkPool and Fagerhult 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 TalkPool and Fagerhult into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TalkPool AG and Fagerhult AB, you can compare the effects of market volatilities on TalkPool and Fagerhult 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 TalkPool with a short position of Fagerhult. Check out your portfolio center. Please also check ongoing floating volatility patterns of TalkPool and Fagerhult.
Diversification Opportunities for TalkPool and Fagerhult
Poor diversification
The 3 months correlation between TalkPool and Fagerhult is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding TalkPool AG and Fagerhult AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fagerhult AB and TalkPool 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 TalkPool AG are associated (or correlated) with Fagerhult. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fagerhult AB has no effect on the direction of TalkPool i.e., TalkPool and Fagerhult go up and down completely randomly.
Pair Corralation between TalkPool and Fagerhult
Assuming the 90 days trading horizon TalkPool AG is expected to generate 2.25 times more return on investment than Fagerhult. However, TalkPool is 2.25 times more volatile than Fagerhult AB. It trades about 0.05 of its potential returns per unit of risk. Fagerhult AB is currently generating about -0.01 per unit of risk. If you would invest 480.00 in TalkPool AG on September 2, 2024 and sell it today you would earn a total of 174.00 from holding TalkPool AG or generate 36.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TalkPool AG vs. Fagerhult AB
Performance |
| Timeline |
| TalkPool AG |
| Fagerhult AB |
TalkPool and Fagerhult Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TalkPool and Fagerhult
The main advantage of trading using opposite TalkPool and Fagerhult positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TalkPool position performs unexpectedly, Fagerhult 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 Fagerhult will offset losses from the drop in Fagerhult's long position.| TalkPool vs. Checkin Group AB | TalkPool vs. Midsummer AB | TalkPool vs. Hexatronic Group AB | TalkPool vs. Cint Group AB |
| Fagerhult vs. Samhllsbyggnadsbolaget i Norden | Fagerhult vs. Sinch AB | Fagerhult vs. Embracer Group AB | Fagerhult vs. Evolution 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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