Correlation Between Troax Group and BE Group
Can any of the company-specific risk be diversified away by investing in both Troax Group and BE 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 BE 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 BE Group AB, you can compare the effects of market volatilities on Troax Group and BE 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 BE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troax Group and BE Group.
Diversification Opportunities for Troax Group and BE Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Troax and BEGR is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and BE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE 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 BE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Group AB has no effect on the direction of Troax Group i.e., Troax Group and BE Group go up and down completely randomly.
Pair Corralation between Troax Group and BE Group
Assuming the 90 days trading horizon Troax Group AB is expected to generate 1.21 times more return on investment than BE Group. However, Troax Group is 1.21 times more volatile than BE Group AB. It trades about -0.16 of its potential returns per unit of risk. BE Group AB is currently generating about -0.37 per unit of risk. If you would invest 22,050 in Troax Group AB on September 2, 2024 and sell it today you would lose (1,200) from holding Troax Group AB or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Troax Group AB vs. BE Group AB
Performance |
| Timeline |
| Troax Group AB |
| BE Group AB |
Troax Group and BE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Troax Group and BE Group
The main advantage of trading using opposite Troax Group and BE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Troax Group position performs unexpectedly, BE 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 BE Group will offset losses from the drop in BE Group's long position.| Troax Group vs. Samhllsbyggnadsbolaget i Norden | Troax Group vs. Sinch AB | Troax Group vs. Embracer Group AB | Troax Group vs. Evolution AB |
| BE Group vs. Bjorn Borg AB | BE Group vs. BioInvent International AB | BE Group vs. Lindab International AB | BE Group vs. Clas Ohlson 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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