Correlation Between Serstech and Triboron International

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

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

Diversification Opportunities for Serstech and Triboron International

-0.56

Correlation Coefficient

Serstech  Triboron International

Excellent diversification

The 3 months correlation between Serstech and Triboron is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Serstech AB and Triboron International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triboron International and Serstech 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 Serstech AB are associated (or correlated) with Triboron International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triboron International has no effect on the direction of Serstech i.e., Serstech and Triboron International go up and down completely randomly.

Pair Corralation between Serstech and Triboron International

Assuming the 90 days trading horizon Serstech AB is expected to under-perform the Triboron International. In addition to that, Serstech is 1.1 times more volatile than Triboron International AB. It trades about 0.0 of its total potential returns per unit of risk. Triboron International AB is currently generating about 0.0 per unit of volatility. If you would invest  43.00  in Triboron International AB on September 3, 2024 and sell it today you would lose (3.00) from holding Triboron International AB or give up 6.98% of portfolio value over 90 days.

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

Serstech AB  vs.  Triboron International AB

Serstech AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Triboron International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triboron International AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Triboron International is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Serstech and Triboron International

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

The idea behind Serstech AB and Triboron International 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.