Correlation Between Troax Group and Beijer Ref
Can any of the company-specific risk be diversified away by investing in both Troax Group and Beijer Ref 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 Beijer Ref 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 Beijer Ref AB, you can compare the effects of market volatilities on Troax Group and Beijer Ref 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 Beijer Ref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troax Group and Beijer Ref.
Diversification Opportunities for Troax Group and Beijer Ref
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Troax and Beijer is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Beijer Ref AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijer Ref 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 Beijer Ref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijer Ref AB has no effect on the direction of Troax Group i.e., Troax Group and Beijer Ref go up and down completely randomly.
Pair Corralation between Troax Group and Beijer Ref
Assuming the 90 days trading horizon Troax Group AB is expected to under-perform the Beijer Ref. But the stock apears to be less risky and, when comparing its historical volatility, Troax Group AB is 1.3 times less risky than Beijer Ref. The stock trades about -0.08 of its potential returns per unit of risk. The Beijer Ref AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 16,190 in Beijer Ref AB on August 29, 2024 and sell it today you would lose (20.00) from holding Beijer Ref AB or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Troax Group AB vs. Beijer Ref AB
Performance |
| Timeline |
| Troax Group AB |
| Beijer Ref AB |
Troax Group and Beijer Ref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Troax Group and Beijer Ref
The main advantage of trading using opposite Troax Group and Beijer Ref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Troax Group position performs unexpectedly, Beijer Ref 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 Beijer Ref will offset losses from the drop in Beijer Ref's long position.| Troax Group vs. Addtech AB | Troax Group vs. Teqnion AB | Troax Group vs. Vitec Software Group | Troax Group vs. Lagercrantz Group AB |
| Beijer Ref vs. Lagercrantz Group AB | Beijer Ref vs. Addtech AB | Beijer Ref vs. AddLife AB | Beijer Ref vs. Bufab Holding 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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