Correlation Between TF Bank and Arctic Blue
Can any of the company-specific risk be diversified away by investing in both TF Bank and Arctic Blue 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 TF Bank and Arctic Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TF Bank AB and Arctic Blue Beverages, you can compare the effects of market volatilities on TF Bank and Arctic Blue 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 TF Bank with a short position of Arctic Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of TF Bank and Arctic Blue.
Diversification Opportunities for TF Bank and Arctic Blue
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TFBANK and Arctic is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding TF Bank AB and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages and TF Bank 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 TF Bank AB are associated (or correlated) with Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of TF Bank i.e., TF Bank and Arctic Blue go up and down completely randomly.
Pair Corralation between TF Bank and Arctic Blue
Assuming the 90 days trading horizon TF Bank AB is expected to generate 0.75 times more return on investment than Arctic Blue. However, TF Bank AB is 1.34 times less risky than Arctic Blue. It trades about 0.18 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.46 per unit of risk. If you would invest 32,400 in TF Bank AB on September 12, 2024 and sell it today you would earn a total of 2,900 from holding TF Bank AB or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TF Bank AB vs. Arctic Blue Beverages
Performance |
| Timeline |
| TF Bank AB |
| Arctic Blue Beverages |
TF Bank and Arctic Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TF Bank and Arctic Blue
The main advantage of trading using opposite TF Bank and Arctic Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TF Bank position performs unexpectedly, Arctic Blue 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 Arctic Blue will offset losses from the drop in Arctic Blue's long position.| TF Bank vs. Koninklijke Heijmans NV | TF Bank vs. Trelleborg AB | TF Bank vs. Ferronordic AB | TF Bank vs. KABE Group AB |
| Arctic Blue vs. Sdiptech AB | Arctic Blue vs. SolTech Energy Sweden | Arctic Blue vs. White Pearl Technology | Arctic Blue vs. Investment AB Oresund |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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