Correlation Between TradeDoubler and Ferronordic

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

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

Diversification Opportunities for TradeDoubler and Ferronordic

-0.37

Correlation Coefficient

TradeDoubler  Ferronordic

Very good diversification

The 3 months correlation between TradeDoubler and Ferronordic is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding TradeDoubler AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB and TradeDoubler 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 TradeDoubler AB are associated (or correlated) with Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of TradeDoubler i.e., TradeDoubler and Ferronordic go up and down completely randomly.

Pair Corralation between TradeDoubler and Ferronordic

Assuming the 90 days trading horizon TradeDoubler AB is expected to generate 1.21 times more return on investment than Ferronordic. However, TradeDoubler is 1.21 times more volatile than Ferronordic AB. It trades about -0.02 of its potential returns per unit of risk. Ferronordic AB is currently generating about -0.07 per unit of risk. If you would invest  367.00  in TradeDoubler AB on September 3, 2024 and sell it today you would lose (17.00) from holding TradeDoubler AB or give up 4.63% of portfolio value over 90 days.

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

TradeDoubler AB  vs.  Ferronordic AB

TradeDoubler AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TradeDoubler AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TradeDoubler is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ferronordic AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ferronordic AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with TradeDoubler and Ferronordic

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

The idea behind TradeDoubler AB and Ferronordic 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.