Correlation Between Chrysalis Investments and Tobii AB

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

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

Diversification Opportunities for Chrysalis Investments and Tobii AB

-0.6

Correlation Coefficient

Chrysalis Investments  Tobii AB

Excellent diversification

The 3 months correlation between Chrysalis and Tobii is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments and Tobii AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tobii AB and Chrysalis Investments 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 Chrysalis Investments are associated (or correlated) with Tobii AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tobii AB has no effect on the direction of Chrysalis Investments i.e., Chrysalis Investments and Tobii AB go up and down completely randomly.

Pair Corralation between Chrysalis Investments and Tobii AB

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 0.44 times more return on investment than Tobii AB. However, Chrysalis Investments is 2.29 times less risky than Tobii AB. It trades about 0.2 of its potential returns per unit of risk. Tobii AB is currently generating about -0.09 per unit of risk. If you would invest  8,100  in Chrysalis Investments on September 12, 2024 and sell it today you would earn a total of  1,720  from holding Chrysalis Investments or generate 21.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Chrysalis Investments  vs.  Tobii AB

Chrysalis Investments

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Chrysalis Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tobii AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tobii AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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 Chrysalis Investments and Tobii AB

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

The idea behind Chrysalis Investments and Tobii 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.