Correlation Between Troax Group and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Troax Group and Inwido AB 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 Inwido AB 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 Inwido AB, you can compare the effects of market volatilities on Troax Group and Inwido AB 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 Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troax Group and Inwido AB.
Diversification Opportunities for Troax Group and Inwido AB
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Troax and Inwido is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Troax Group i.e., Troax Group and Inwido AB go up and down completely randomly.
Pair Corralation between Troax Group and Inwido AB
Assuming the 90 days trading horizon Troax Group AB is expected to generate 1.64 times more return on investment than Inwido AB. However, Troax Group is 1.64 times more volatile than Inwido AB. It trades about -0.08 of its potential returns per unit of risk. Inwido AB is currently generating about -0.25 per unit of risk. If you would invest 21,500 in Troax Group AB on August 29, 2024 and sell it today you would lose (750.00) from holding Troax Group AB or give up 3.49% 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. Inwido AB
Performance |
| Timeline |
| Troax Group AB |
| Inwido AB |
Troax Group and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Troax Group and Inwido AB
The main advantage of trading using opposite Troax Group and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Troax Group position performs unexpectedly, Inwido AB 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 Inwido AB will offset losses from the drop in Inwido AB'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 |
| Inwido AB vs. Upsales Technology AB | Inwido AB vs. OptiCept Technologies AB | Inwido AB vs. Filo Mining Corp | Inwido AB vs. Nordic Iron Ore |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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