Correlation Between Trifork Holding and Aquaporin

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

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

Diversification Opportunities for Trifork Holding and Aquaporin

0.47

Correlation Coefficient

Trifork Holding  Aquaporin

Very weak diversification

The 3 months correlation between Trifork and Aquaporin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Trifork Holding AG and Aquaporin AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquaporin AS and Trifork Holding 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 Trifork Holding AG are associated (or correlated) with Aquaporin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquaporin AS has no effect on the direction of Trifork Holding i.e., Trifork Holding and Aquaporin go up and down completely randomly.

Pair Corralation between Trifork Holding and Aquaporin

Assuming the 90 days trading horizon Trifork Holding AG is expected to generate 0.43 times more return on investment than Aquaporin. However, Trifork Holding AG is 2.33 times less risky than Aquaporin. It trades about 0.05 of its potential returns per unit of risk. Aquaporin AS is currently generating about -0.05 per unit of risk. If you would invest  8,000  in Trifork Holding AG on December 4, 2024 and sell it today you would earn a total of  370.00  from holding Trifork Holding AG or generate 4.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Trifork Holding AG  vs.  Aquaporin AS

Trifork Holding AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trifork Holding AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Trifork Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Aquaporin AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquaporin AS 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Trifork Holding and Aquaporin

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

The idea behind Trifork Holding AG and Aquaporin AS 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.