Correlation Between Tryg AS and Fundamental Invest
Can any of the company-specific risk be diversified away by investing in both Tryg AS and Fundamental Invest 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 Tryg AS and Fundamental Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tryg AS and Fundamental Invest Stock, you can compare the effects of market volatilities on Tryg AS and Fundamental Invest 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 Tryg AS with a short position of Fundamental Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tryg AS and Fundamental Invest.
Diversification Opportunities for Tryg AS and Fundamental Invest
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tryg and Fundamental is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tryg AS and Fundamental Invest Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Invest Stock and Tryg AS 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 Tryg AS are associated (or correlated) with Fundamental Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Invest Stock has no effect on the direction of Tryg AS i.e., Tryg AS and Fundamental Invest go up and down completely randomly.
Pair Corralation between Tryg AS and Fundamental Invest
Assuming the 90 days trading horizon Tryg AS is expected to generate 0.79 times more return on investment than Fundamental Invest. However, Tryg AS is 1.27 times less risky than Fundamental Invest. It trades about 0.04 of its potential returns per unit of risk. Fundamental Invest Stock is currently generating about -0.05 per unit of risk. If you would invest 16,150 in Tryg AS on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Tryg AS or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tryg AS vs. Fundamental Invest Stock
Performance |
| Timeline |
| Tryg AS |
| Fundamental Invest Stock |
Tryg AS and Fundamental Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tryg AS and Fundamental Invest
The main advantage of trading using opposite Tryg AS and Fundamental Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tryg AS position performs unexpectedly, Fundamental Invest 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 Fundamental Invest will offset losses from the drop in Fundamental Invest's long position.The idea behind Tryg AS and Fundamental Invest Stock 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.| Fundamental Invest vs. Novo Nordisk AS | Fundamental Invest vs. Nordea Bank Abp | Fundamental Invest vs. DSV Panalpina AS | Fundamental Invest vs. AP Mller |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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