Correlation Between Troax Group and Absolent Group
Can any of the company-specific risk be diversified away by investing in both Troax Group and Absolent Group 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 Troax Group and Absolent Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Troax Group AB and Absolent Group AB, you can compare the effects of market volatilities on Troax Group and Absolent Group 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 Troax Group with a short position of Absolent Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troax Group and Absolent Group.
Diversification Opportunities for Troax Group and Absolent Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Troax and Absolent is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Absolent Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolent Group AB and Troax 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 Troax Group AB are associated (or correlated) with Absolent Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolent Group AB has no effect on the direction of Troax Group i.e., Troax Group and Absolent Group go up and down completely randomly.
Pair Corralation between Troax Group and Absolent Group
Assuming the 90 days trading horizon Troax Group AB is expected to generate 0.5 times more return on investment than Absolent Group. However, Troax Group AB is 2.01 times less risky than Absolent Group. It trades about 0.05 of its potential returns per unit of risk. Absolent Group AB is currently generating about -0.07 per unit of risk. If you would invest 23,100 in Troax Group AB on November 4, 2024 and sell it today you would earn a total of 300.00 from holding Troax Group AB or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Troax Group AB vs. Absolent Group AB
Performance |
| Timeline |
| Troax Group AB |
| Absolent Group AB |
Troax Group and Absolent Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Troax Group and Absolent Group
The main advantage of trading using opposite Troax Group and Absolent Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Troax Group position performs unexpectedly, Absolent Group 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 Absolent Group will offset losses from the drop in Absolent Group's long position.| Troax Group vs. NOTE AB | Troax Group vs. Proact IT Group | Troax Group vs. SinterCast AB | Troax Group vs. Rottneros AB |
| Absolent Group vs. AQ Group AB | Absolent Group vs. Troax Group AB | Absolent Group vs. Bufab Holding AB | Absolent Group vs. Beijer Ref 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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