Correlation Between Troax Group and Sweco AB
Can any of the company-specific risk be diversified away by investing in both Troax Group and Sweco 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 Sweco 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 Sweco AB, you can compare the effects of market volatilities on Troax Group and Sweco 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 Sweco AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troax Group and Sweco AB.
Diversification Opportunities for Troax Group and Sweco AB
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Troax and Sweco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Sweco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweco 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 Sweco AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweco AB has no effect on the direction of Troax Group i.e., Troax Group and Sweco AB go up and down completely randomly.
Pair Corralation between Troax Group and Sweco AB
Assuming the 90 days trading horizon Troax Group AB is expected to generate 0.75 times more return on investment than Sweco AB. However, Troax Group AB is 1.34 times less risky than Sweco AB. It trades about -0.08 of its potential returns per unit of risk. Sweco AB is currently generating about -0.13 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Troax Group AB vs. Sweco AB
Performance |
| Timeline |
| Troax Group AB |
| Sweco AB |
Troax Group and Sweco AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Troax Group and Sweco AB
The main advantage of trading using opposite Troax Group and Sweco AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Troax Group position performs unexpectedly, Sweco 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 Sweco AB will offset losses from the drop in Sweco 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 |
| Sweco AB vs. Indutrade AB | Sweco AB vs. Beijer Ref AB | Sweco AB vs. Addtech AB | Sweco AB vs. NIBE Industrier 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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