Correlation Between Truecaller and AstraZeneca PLC

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

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

Diversification Opportunities for Truecaller and AstraZeneca PLC

-0.65

Correlation Coefficient

Truecaller  AstraZeneca PLC

Excellent diversification

The 3 months correlation between Truecaller and AstraZeneca is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Truecaller AB and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and Truecaller 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 Truecaller AB are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Truecaller i.e., Truecaller and AstraZeneca PLC go up and down completely randomly.

Pair Corralation between Truecaller and AstraZeneca PLC

Assuming the 90 days trading horizon Truecaller AB is expected to generate 1.82 times more return on investment than AstraZeneca PLC. However, Truecaller is 1.82 times more volatile than AstraZeneca PLC. It trades about 0.2 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.18 per unit of risk. If you would invest  3,490  in Truecaller AB on September 2, 2024 and sell it today you would earn a total of  1,426  from holding Truecaller AB or generate 40.86% return on investment over 90 days.

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

Truecaller AB  vs.  AstraZeneca PLC

Truecaller AB

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Truecaller AB are ranked lower than 15 (%) 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.

AstraZeneca PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AstraZeneca PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Truecaller and AstraZeneca PLC

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

The idea behind Truecaller AB and AstraZeneca PLC 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.