Correlation Between Truecaller and Ctek AB

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

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

Diversification Opportunities for Truecaller and Ctek AB

-0.82

Correlation Coefficient

Truecaller  Ctek AB

Pay attention - limited upside

The 3 months correlation between Truecaller and Ctek is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Truecaller AB and Ctek AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ctek AB and Truecaller 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 Truecaller AB are associated (or correlated) with Ctek AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ctek AB has no effect on the direction of Truecaller i.e., Truecaller and Ctek AB go up and down completely randomly.

Pair Corralation between Truecaller and Ctek AB

Assuming the 90 days trading horizon Truecaller AB is expected to generate 1.29 times more return on investment than Ctek AB. However, Truecaller is 1.29 times more volatile than Ctek AB. It trades about 0.04 of its potential returns per unit of risk. Ctek AB is currently generating about -0.05 per unit of risk. If you would invest  3,699  in Truecaller AB on September 29, 2024 and sell it today you would earn a total of  1,501  from holding Truecaller AB or generate 40.58% return on investment over 90 days.

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

Truecaller AB  vs.  Ctek AB

Truecaller AB

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Truecaller AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Truecaller sustained solid returns over the last few months and may actually be approaching a breakup point.

Ctek AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ctek AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Truecaller and Ctek AB

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

The idea behind Truecaller AB and Ctek 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.