Correlation Between Teqnion AB and Garo AB
Can any of the company-specific risk be diversified away by investing in both Teqnion AB and Garo AB 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 Garo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teqnion AB and Garo AB, you can compare the effects of market volatilities on Teqnion AB and Garo AB 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 Garo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teqnion AB and Garo AB.
Diversification Opportunities for Teqnion AB and Garo AB
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teqnion and Garo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Teqnion AB and Garo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garo 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 Garo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garo AB has no effect on the direction of Teqnion AB i.e., Teqnion AB and Garo AB go up and down completely randomly.
Pair Corralation between Teqnion AB and Garo AB
Assuming the 90 days trading horizon Teqnion AB is expected to generate 0.93 times more return on investment than Garo AB. However, Teqnion AB is 1.08 times less risky than Garo AB. It trades about 0.03 of its potential returns per unit of risk. Garo AB is currently generating about -0.11 per unit of risk. If you would invest 13,060 in Teqnion AB on August 25, 2024 and sell it today you would earn a total of 3,940 from holding Teqnion AB or generate 30.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teqnion AB vs. Garo AB
Performance |
| Timeline |
| Teqnion AB |
| Garo AB |
Teqnion AB and Garo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teqnion AB and Garo AB
The main advantage of trading using opposite Teqnion AB and Garo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teqnion AB position performs unexpectedly, Garo AB 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 Garo AB will offset losses from the drop in Garo AB's long position.| Teqnion AB vs. Indutrade AB | Teqnion AB vs. Lifco AB | Teqnion AB vs. Lagercrantz Group AB | Teqnion AB vs. AddLife AB |
| Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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