Correlation Between Intrum Justitia and Traton SE

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

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

Diversification Opportunities for Intrum Justitia and Traton SE

-0.5

Correlation Coefficient

Intrum Justitia  Traton SE

Very good diversification

The 3 months correlation between Intrum and Traton is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Intrum Justitia AB and Traton SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traton SE and Intrum Justitia 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 Intrum Justitia AB are associated (or correlated) with Traton SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traton SE has no effect on the direction of Intrum Justitia i.e., Intrum Justitia and Traton SE go up and down completely randomly.

Pair Corralation between Intrum Justitia and Traton SE

Assuming the 90 days trading horizon Intrum Justitia AB is expected to under-perform the Traton SE. In addition to that, Intrum Justitia is 2.02 times more volatile than Traton SE. It trades about -0.15 of its total potential returns per unit of risk. Traton SE is currently generating about 0.0 per unit of volatility. If you would invest  33,300  in Traton SE on September 3, 2024 and sell it today you would lose (300.00) from holding Traton SE or give up 0.9% of portfolio value over 90 days.

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

Intrum Justitia AB  vs.  Traton SE

Intrum Justitia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intrum Justitia AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

Traton SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Traton SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Traton SE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intrum Justitia and Traton SE

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

The idea behind Intrum Justitia AB and Traton SE 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.