Correlation Between Teqnion AB and Impact Coatings
Can any of the company-specific risk be diversified away by investing in both Teqnion AB and Impact Coatings 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 Impact Coatings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teqnion AB and Impact Coatings publ, you can compare the effects of market volatilities on Teqnion AB and Impact Coatings 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 Impact Coatings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teqnion AB and Impact Coatings.
Diversification Opportunities for Teqnion AB and Impact Coatings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teqnion and Impact is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Teqnion AB and Impact Coatings publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Coatings publ 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 Impact Coatings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Coatings publ has no effect on the direction of Teqnion AB i.e., Teqnion AB and Impact Coatings go up and down completely randomly.
Pair Corralation between Teqnion AB and Impact Coatings
Assuming the 90 days trading horizon Teqnion AB is expected to under-perform the Impact Coatings. But the stock apears to be less risky and, when comparing its historical volatility, Teqnion AB is 2.9 times less risky than Impact Coatings. The stock trades about -0.13 of its potential returns per unit of risk. The Impact Coatings publ is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 420.00 in Impact Coatings publ on August 29, 2024 and sell it today you would lose (3.00) from holding Impact Coatings publ or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teqnion AB vs. Impact Coatings publ
Performance |
| Timeline |
| Teqnion AB |
| Impact Coatings publ |
Teqnion AB and Impact Coatings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teqnion AB and Impact Coatings
The main advantage of trading using opposite Teqnion AB and Impact Coatings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teqnion AB position performs unexpectedly, Impact Coatings 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 Impact Coatings will offset losses from the drop in Impact Coatings' long position.The idea behind Teqnion AB and Impact Coatings publ pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Impact Coatings vs. Powercell Sweden | Impact Coatings vs. Teco 2030 Asa | Impact Coatings vs. Hexagon Purus As | Impact Coatings vs. Minesto 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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