Correlation Between Weiss Korea and Tobii AB

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

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

Diversification Opportunities for Weiss Korea and Tobii AB

0.68

Correlation Coefficient

Weiss Korea  Tobii AB

Poor diversification

The 3 months correlation between Weiss and Tobii is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity and Tobii AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tobii AB and Weiss Korea 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 Weiss Korea Opportunity 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 Weiss Korea i.e., Weiss Korea and Tobii AB go up and down completely randomly.

Pair Corralation between Weiss Korea and Tobii AB

Assuming the 90 days trading horizon Weiss Korea Opportunity is expected to generate 0.31 times more return on investment than Tobii AB. However, Weiss Korea Opportunity is 3.23 times less risky than Tobii AB. It trades about -0.18 of its potential returns per unit of risk. Tobii AB is currently generating about -0.09 per unit of risk. If you would invest  15,700  in Weiss Korea Opportunity on September 12, 2024 and sell it today you would lose (2,000) from holding Weiss Korea Opportunity or give up 12.74% of portfolio value over 90 days.

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

Weiss Korea Opportunity  vs.  Tobii AB

Weiss Korea Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weiss Korea Opportunity 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.

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 Weiss Korea and Tobii AB

The main advantage of trading using opposite Weiss Korea and Tobii AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weiss Korea 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 Weiss Korea Opportunity 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .