Correlation Between Truecaller and NCAB
Can any of the company-specific risk be diversified away by investing in both Truecaller and NCAB 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 Truecaller and NCAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truecaller AB and NCAB Group, you can compare the effects of market volatilities on Truecaller and NCAB 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 Truecaller with a short position of NCAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truecaller and NCAB.
Diversification Opportunities for Truecaller and NCAB
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Truecaller and NCAB is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Truecaller AB and NCAB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCAB Group and Truecaller 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 Truecaller AB are associated (or correlated) with NCAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCAB Group has no effect on the direction of Truecaller i.e., Truecaller and NCAB go up and down completely randomly.
Pair Corralation between Truecaller and NCAB
Assuming the 90 days trading horizon Truecaller AB is expected to generate 0.91 times more return on investment than NCAB. However, Truecaller AB is 1.1 times less risky than NCAB. It trades about 0.1 of its potential returns per unit of risk. NCAB Group is currently generating about 0.03 per unit of risk. If you would invest 2,575 in Truecaller AB on August 25, 2024 and sell it today you would earn a total of 2,131 from holding Truecaller AB or generate 82.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Truecaller AB vs. NCAB Group
Performance |
| Timeline |
| Truecaller AB |
| NCAB Group |
Truecaller and NCAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truecaller and NCAB
The main advantage of trading using opposite Truecaller and NCAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truecaller position performs unexpectedly, NCAB 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 NCAB will offset losses from the drop in NCAB's long position.| Truecaller vs. Sinch AB | Truecaller vs. Hexatronic Group AB | Truecaller vs. Samhllsbyggnadsbolaget i Norden | Truecaller vs. Storskogen Group AB |
| NCAB vs. MIPS AB | NCAB vs. Hexatronic Group AB | NCAB vs. Lagercrantz Group AB | NCAB vs. Vitec Software Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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