Correlation Between AQ Group and Teqnion AB

Can any of the company-specific risk be diversified away by investing in both AQ Group and Teqnion 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 AQ Group and Teqnion AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AQ Group AB and Teqnion AB, you can compare the effects of market volatilities on AQ Group and Teqnion 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 AQ Group with a short position of Teqnion AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AQ Group and Teqnion AB.

Diversification Opportunities for AQ Group and Teqnion AB

-0.59

Correlation Coefficient

AQ Group  Teqnion AB

Excellent diversification

The 3 months correlation between AQ Group and Teqnion is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AQ Group AB and Teqnion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teqnion AB and AQ 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 AQ Group AB are associated (or correlated) with Teqnion AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teqnion AB has no effect on the direction of AQ Group i.e., AQ Group and Teqnion AB go up and down completely randomly.

Pair Corralation between AQ Group and Teqnion AB

Assuming the 90 days horizon AQ Group AB is expected to generate 2.19 times more return on investment than Teqnion AB. However, AQ Group is 2.19 times more volatile than Teqnion AB. It trades about 0.09 of its potential returns per unit of risk. Teqnion AB is currently generating about -0.21 per unit of risk. If you would invest  12,832  in AQ Group AB on September 16, 2024 and sell it today you would earn a total of  1,524  from holding AQ Group AB or generate 11.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AQ Group AB  vs.  Teqnion AB

AQ Group AB

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AQ Group AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AQ Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Teqnion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teqnion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AQ Group and Teqnion AB

The main advantage of trading using opposite AQ Group and Teqnion AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AQ Group position performs unexpectedly, Teqnion 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 Teqnion AB will offset losses from the drop in Teqnion AB's long position.

The idea behind AQ Group AB and Teqnion AB 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.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.