Correlation Between Inission and Teqnion AB

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

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

Diversification Opportunities for Inission and Teqnion AB

0.82

Correlation Coefficient

Inission  Teqnion AB

Very poor diversification

The 3 months correlation between Inission and Teqnion is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Inission AB and Teqnion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teqnion AB and Inission 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 Inission AB are associated (or correlated) with Teqnion AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teqnion AB has no effect on the direction of Inission i.e., Inission and Teqnion AB go up and down completely randomly.

Pair Corralation between Inission and Teqnion AB

Assuming the 90 days trading horizon Inission AB is expected to under-perform the Teqnion AB. In addition to that, Inission is 1.68 times more volatile than Teqnion AB. It trades about -0.15 of its total potential returns per unit of risk. Teqnion AB is currently generating about -0.2 per unit of volatility. If you would invest  19,780  in Teqnion AB on September 1, 2024 and sell it today you would lose (2,860) from holding Teqnion AB or give up 14.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.48%
Values	Daily Returns

Inission AB  vs.  Teqnion AB

Inission AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inission 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 basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Teqnion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teqnion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Inission and Teqnion AB

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

The idea behind Inission AB and Teqnion 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.