Correlation Between Teqnion AB and Invisio Communications
Can any of the company-specific risk be diversified away by investing in both Teqnion AB and Invisio Communications 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 Invisio Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teqnion AB and Invisio Communications AB, you can compare the effects of market volatilities on Teqnion AB and Invisio Communications 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 Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teqnion AB and Invisio Communications.
Diversification Opportunities for Teqnion AB and Invisio Communications
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teqnion and Invisio is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Teqnion AB and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications 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 Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of Teqnion AB i.e., Teqnion AB and Invisio Communications go up and down completely randomly.
Pair Corralation between Teqnion AB and Invisio Communications
Assuming the 90 days trading horizon Teqnion AB is expected to under-perform the Invisio Communications. In addition to that, Teqnion AB is 1.05 times more volatile than Invisio Communications AB. It trades about -0.02 of its total potential returns per unit of risk. Invisio Communications AB is currently generating about 0.1 per unit of volatility. If you would invest 16,428 in Invisio Communications AB on August 25, 2024 and sell it today you would earn a total of 11,172 from holding Invisio Communications AB or generate 68.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teqnion AB vs. Invisio Communications AB
Performance |
| Timeline |
| Teqnion AB |
| Invisio Communications |
Teqnion AB and Invisio Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teqnion AB and Invisio Communications
The main advantage of trading using opposite Teqnion AB and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teqnion AB position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' long position.| Teqnion AB vs. Indutrade AB | Teqnion AB vs. Lifco AB | Teqnion AB vs. Lagercrantz Group AB | Teqnion AB vs. AddLife AB |
| Invisio Communications vs. Addtech AB | Invisio Communications vs. Teqnion AB | Invisio Communications vs. Vitec Software Group | Invisio Communications vs. Lagercrantz 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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