Correlation Between Trainers House and SSAB AB

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

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

Diversification Opportunities for Trainers House and SSAB AB

0.02

Correlation Coefficient

Trainers House  SSAB AB

Significant diversification

The 3 months correlation between Trainers and SSAB is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser and Trainers House 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 Trainers House Oyj are associated (or correlated) with SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Trainers House i.e., Trainers House and SSAB AB go up and down completely randomly.

Pair Corralation between Trainers House and SSAB AB

Assuming the 90 days trading horizon Trainers House Oyj is expected to generate 2.57 times more return on investment than SSAB AB. However, Trainers House is 2.57 times more volatile than SSAB AB ser. It trades about 0.21 of its potential returns per unit of risk. SSAB AB ser is currently generating about 0.04 per unit of risk. If you would invest  210.00  in Trainers House Oyj on October 25, 2024 and sell it today you would earn a total of  30.00  from holding Trainers House Oyj or generate 14.29% return on investment over 90 days.

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

Trainers House Oyj  vs.  SSAB AB ser

Trainers House Oyj

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trainers House Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Trainers House may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SSAB AB ser

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Trainers House and SSAB AB

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

The idea behind Trainers House Oyj and SSAB AB ser 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.