Correlation Between Terranet and Cint Group

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

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

Diversification Opportunities for Terranet and Cint Group

0.88

Correlation Coefficient

Terranet  Cint Group

Very poor diversification

The 3 months correlation between Terranet and Cint is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Terranet AB and Cint Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cint Group AB and Terranet 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 Terranet AB are associated (or correlated) with Cint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cint Group AB has no effect on the direction of Terranet i.e., Terranet and Cint Group go up and down completely randomly.

Pair Corralation between Terranet and Cint Group

Assuming the 90 days trading horizon Terranet AB is expected to generate 1.01 times more return on investment than Cint Group. However, Terranet is 1.01 times more volatile than Cint Group AB. It trades about -0.06 of its potential returns per unit of risk. Cint Group AB is currently generating about -0.21 per unit of risk. If you would invest  15.00  in Terranet AB on December 2, 2024 and sell it today you would lose (3.00) from holding Terranet AB or give up 20.0% of portfolio value over 90 days.

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

Terranet AB  vs.  Cint Group AB

Terranet AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Terranet AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators 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.

Cint Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cint Group 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.

Pair Trading with Terranet and Cint Group

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

The idea behind Terranet AB and Cint Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.