Correlation Between Trifork Holding and FOM Technologies

Can any of the company-specific risk be diversified away by investing in both Trifork Holding and FOM Technologies 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 FOM Technologies 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 FOM Technologies AS, you can compare the effects of market volatilities on Trifork Holding and FOM Technologies 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 FOM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trifork Holding and FOM Technologies.

Diversification Opportunities for Trifork Holding and FOM Technologies

0.11

Correlation Coefficient

Trifork Holding  FOM Technologies

Average diversification

The 3 months correlation between Trifork and FOM is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Trifork Holding AG and FOM Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOM Technologies 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 FOM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOM Technologies has no effect on the direction of Trifork Holding i.e., Trifork Holding and FOM Technologies go up and down completely randomly.

Pair Corralation between Trifork Holding and FOM Technologies

Assuming the 90 days trading horizon Trifork Holding AG is expected to generate 0.48 times more return on investment than FOM Technologies. However, Trifork Holding AG is 2.09 times less risky than FOM Technologies. It trades about 0.12 of its potential returns per unit of risk. FOM Technologies AS is currently generating about 0.02 per unit of risk. If you would invest  7,450  in Trifork Holding AG on December 30, 2024 and sell it today you would earn a total of  1,250  from holding Trifork Holding AG or generate 16.78% return on investment over 90 days.

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

Trifork Holding AG  vs.  FOM Technologies AS

Trifork Holding AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trifork Holding AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Trifork Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

FOM Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FOM Technologies AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, FOM Technologies is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Trifork Holding and FOM Technologies

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

The idea behind Trifork Holding AG and FOM Technologies 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 Commodity Directory module to find actively traded commodities issued by global exchanges.