Correlation Between ChargePanel and Truecaller

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

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

Diversification Opportunities for ChargePanel and Truecaller

-0.72

Correlation Coefficient

ChargePanel  Truecaller

Pay attention - limited upside

The 3 months correlation between ChargePanel and Truecaller is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ChargePanel AB and Truecaller AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truecaller AB and ChargePanel 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 ChargePanel AB are associated (or correlated) with Truecaller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truecaller AB has no effect on the direction of ChargePanel i.e., ChargePanel and Truecaller go up and down completely randomly.

Pair Corralation between ChargePanel and Truecaller

Assuming the 90 days trading horizon ChargePanel AB is expected to under-perform the Truecaller. But the stock apears to be less risky and, when comparing its historical volatility, ChargePanel AB is 1.05 times less risky than Truecaller. The stock trades about -0.08 of its potential returns per unit of risk. The Truecaller AB is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  3,704  in Truecaller AB on September 10, 2024 and sell it today you would earn a total of  1,761  from holding Truecaller AB or generate 47.54% return on investment over 90 days.

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

ChargePanel AB  vs.  Truecaller AB

ChargePanel AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePanel AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Truecaller AB

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Truecaller AB are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Truecaller sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChargePanel and Truecaller

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

The idea behind ChargePanel AB and Truecaller 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 Transaction History module to view history of all your transactions and understand their impact on performance.