Correlation Between Clean Motion and Triboron International

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

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

Diversification Opportunities for Clean Motion and Triboron International

0.72

Correlation Coefficient

Clean Motion  Triboron International

Poor diversification

The 3 months correlation between Clean and Triboron is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion 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 Clean Motion 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 Clean Motion 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 Clean Motion i.e., Clean Motion and Triboron International go up and down completely randomly.

Pair Corralation between Clean Motion and Triboron International

Assuming the 90 days trading horizon Clean Motion AB is expected to generate 0.7 times more return on investment than Triboron International. However, Clean Motion AB is 1.44 times less risky than Triboron International. It trades about -0.1 of its potential returns per unit of risk. Triboron International AB is currently generating about -0.07 per unit of risk. If you would invest  33.00  in Clean Motion AB on December 2, 2024 and sell it today you would lose (7.00) from holding Clean Motion AB or give up 21.21% of portfolio value over 90 days.

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

Clean Motion AB  vs.  Triboron International AB

Clean Motion AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Motion AB 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Triboron International

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Clean Motion and Triboron International

The main advantage of trading using opposite Clean Motion and Triboron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Motion 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 Clean Motion 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.