Correlation Between TRON and SVENSKA AEROGEL
Can any of the company-specific risk be diversified away by investing in both TRON and SVENSKA AEROGEL 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 TRON and SVENSKA AEROGEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRON and SVENSKA AEROGEL HOLDING, you can compare the effects of market volatilities on TRON and SVENSKA AEROGEL 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 TRON with a short position of SVENSKA AEROGEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and SVENSKA AEROGEL.
Diversification Opportunities for TRON and SVENSKA AEROGEL
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TRON and SVENSKA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TRON and SVENSKA AEROGEL HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA AEROGEL HOLDING and TRON 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 TRON are associated (or correlated) with SVENSKA AEROGEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA AEROGEL HOLDING has no effect on the direction of TRON i.e., TRON and SVENSKA AEROGEL go up and down completely randomly.
Pair Corralation between TRON and SVENSKA AEROGEL
Assuming the 90 days trading horizon TRON is expected to generate 0.54 times more return on investment than SVENSKA AEROGEL. However, TRON is 1.84 times less risky than SVENSKA AEROGEL. It trades about -0.07 of its potential returns per unit of risk. SVENSKA AEROGEL HOLDING is currently generating about -0.12 per unit of risk. If you would invest 27.00 in TRON on November 2, 2024 and sell it today you would lose (2.00) from holding TRON or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
TRON vs. SVENSKA AEROGEL HOLDING
Performance |
| Timeline |
| TRON |
| SVENSKA AEROGEL HOLDING |
TRON and SVENSKA AEROGEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRON and SVENSKA AEROGEL
The main advantage of trading using opposite TRON and SVENSKA AEROGEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON position performs unexpectedly, SVENSKA AEROGEL 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 SVENSKA AEROGEL will offset losses from the drop in SVENSKA AEROGEL's long position.The idea behind TRON and SVENSKA AEROGEL HOLDING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SVENSKA AEROGEL vs. Linde plc | SVENSKA AEROGEL vs. Linde PLC | SVENSKA AEROGEL vs. Air Liquide SA | SVENSKA AEROGEL vs. The Sherwin Williams |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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