Correlation Between Teqnion AB and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Teqnion AB and Ferronordic 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 Teqnion AB and Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teqnion AB and Ferronordic AB, you can compare the effects of market volatilities on Teqnion AB and Ferronordic 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 Teqnion AB with a short position of Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teqnion AB and Ferronordic.
Diversification Opportunities for Teqnion AB and Ferronordic
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teqnion and Ferronordic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Teqnion AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB and Teqnion AB 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 Teqnion AB are associated (or correlated) with Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Teqnion AB i.e., Teqnion AB and Ferronordic go up and down completely randomly.
Pair Corralation between Teqnion AB and Ferronordic
Assuming the 90 days trading horizon Teqnion AB is expected to generate 1.11 times more return on investment than Ferronordic. However, Teqnion AB is 1.11 times more volatile than Ferronordic AB. It trades about 0.03 of its potential returns per unit of risk. Ferronordic AB is currently generating about 0.0 per unit of risk. If you would invest 14,040 in Teqnion AB on September 25, 2024 and sell it today you would earn a total of 2,780 from holding Teqnion AB or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Teqnion AB vs. Ferronordic AB
Performance |
| Timeline |
| Teqnion AB |
| Ferronordic AB |
Teqnion AB and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teqnion AB and Ferronordic
The main advantage of trading using opposite Teqnion AB and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teqnion AB position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Teqnion AB vs. Indutrade AB | Teqnion AB vs. Bufab Holding AB | Teqnion AB vs. Alligo AB Series | Teqnion AB vs. Ferronordic AB |
| Ferronordic vs. Indutrade AB | Ferronordic vs. Bufab Holding AB | Ferronordic vs. Alligo AB Series | Ferronordic vs. Teqnion 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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