Correlation Between Troax Group and Fenix Outdoor

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

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

Diversification Opportunities for Troax Group and Fenix Outdoor

-0.33

Correlation Coefficient

Troax Group  Fenix Outdoor

Very good diversification

The 3 months correlation between Troax and Fenix is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Fenix Outdoor International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fenix Outdoor Intern and Troax Group 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 Troax Group AB are associated (or correlated) with Fenix Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fenix Outdoor Intern has no effect on the direction of Troax Group i.e., Troax Group and Fenix Outdoor go up and down completely randomly.

Pair Corralation between Troax Group and Fenix Outdoor

Assuming the 90 days trading horizon Troax Group AB is expected to under-perform the Fenix Outdoor. But the stock apears to be less risky and, when comparing its historical volatility, Troax Group AB is 1.23 times less risky than Fenix Outdoor. The stock trades about -0.11 of its potential returns per unit of risk. The Fenix Outdoor International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  60,000  in Fenix Outdoor International on September 1, 2024 and sell it today you would earn a total of  4,200  from holding Fenix Outdoor International or generate 7.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Troax Group AB  vs.  Fenix Outdoor International

Troax Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fenix Outdoor Intern

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Troax Group and Fenix Outdoor

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

The idea behind Troax Group AB and Fenix Outdoor International 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.