Correlation Between Trip Group and SOEDER SPORTFISKE

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

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

Diversification Opportunities for Trip Group and SOEDER SPORTFISKE

-0.41

Correlation Coefficient

Trip Group  SOEDER SPORTFISKE

Very good diversification

The 3 months correlation between Trip and SOEDER is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Trip Group Limited and SOEDER SPORTFISKE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOEDER SPORTFISKE and Trip Group 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 Trip Group Limited are associated (or correlated) with SOEDER SPORTFISKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOEDER SPORTFISKE has no effect on the direction of Trip Group i.e., Trip Group and SOEDER SPORTFISKE go up and down completely randomly.

Pair Corralation between Trip Group and SOEDER SPORTFISKE

Assuming the 90 days horizon Trip Group Limited is expected to generate 1.17 times more return on investment than SOEDER SPORTFISKE. However, Trip Group is 1.17 times more volatile than SOEDER SPORTFISKE AB. It trades about 0.1 of its potential returns per unit of risk. SOEDER SPORTFISKE AB is currently generating about -0.05 per unit of risk. If you would invest  5,500  in Trip Group Limited on October 22, 2024 and sell it today you would earn a total of  860.00  from holding Trip Group Limited or generate 15.64% return on investment over 90 days.

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

Trip Group Limited  vs.  SOEDER SPORTFISKE AB

Trip Group Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trip Group Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Trip Group reported solid returns over the last few months and may actually be approaching a breakup point.

SOEDER SPORTFISKE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOEDER SPORTFISKE AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Trip Group and SOEDER SPORTFISKE

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

The idea behind Trip Group Limited and SOEDER SPORTFISKE 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.