Correlation Between Transtema Group and TalkPool
Can any of the company-specific risk be diversified away by investing in both Transtema Group and TalkPool 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 Transtema Group and TalkPool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transtema Group AB and TalkPool AG, you can compare the effects of market volatilities on Transtema Group and TalkPool 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 Transtema Group with a short position of TalkPool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transtema Group and TalkPool.
Diversification Opportunities for Transtema Group and TalkPool
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transtema and TalkPool is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Transtema Group AB and TalkPool AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TalkPool AG and Transtema Group 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 Transtema Group AB are associated (or correlated) with TalkPool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TalkPool AG has no effect on the direction of Transtema Group i.e., Transtema Group and TalkPool go up and down completely randomly.
Pair Corralation between Transtema Group and TalkPool
Assuming the 90 days trading horizon Transtema Group AB is expected to under-perform the TalkPool. But the stock apears to be less risky and, when comparing its historical volatility, Transtema Group AB is 1.47 times less risky than TalkPool. The stock trades about -0.02 of its potential returns per unit of risk. The TalkPool AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 540.00 in TalkPool AG on August 25, 2024 and sell it today you would earn a total of 126.00 from holding TalkPool AG or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Transtema Group AB vs. TalkPool AG
Performance |
| Timeline |
| Transtema Group AB |
| TalkPool AG |
Transtema Group and TalkPool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transtema Group and TalkPool
The main advantage of trading using opposite Transtema Group and TalkPool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transtema Group position performs unexpectedly, TalkPool 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 TalkPool will offset losses from the drop in TalkPool's long position.| Transtema Group vs. AstraZeneca PLC | Transtema Group vs. Investor AB ser | Transtema Group vs. Investor AB ser | Transtema Group vs. Atlas Copco AB |
| TalkPool vs. Lidds AB | TalkPool vs. Serstech AB | TalkPool vs. Transtema Group AB | TalkPool vs. Enorama Pharma 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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