Correlation Between Truecaller and Nordnet AB

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

Diversification Opportunities for Truecaller and Nordnet AB

0.04

Correlation Coefficient

Truecaller  Nordnet AB

Significant diversification

The 3 months correlation between Truecaller and Nordnet is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Truecaller AB and Nordnet AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet 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 Nordnet AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet AB has no effect on the direction of Truecaller i.e., Truecaller and Nordnet AB go up and down completely randomly.

Pair Corralation between Truecaller and Nordnet AB

Assuming the 90 days trading horizon Truecaller AB is expected to generate 1.94 times more return on investment than Nordnet AB. However, Truecaller is 1.94 times more volatile than Nordnet AB. It trades about 0.04 of its potential returns per unit of risk. Nordnet AB is currently generating about 0.06 per unit of risk. If you would invest  3,390  in Truecaller AB on September 24, 2024 and sell it today you would earn a total of  1,635  from holding Truecaller AB or generate 48.23% return on investment over 90 days.

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

Truecaller AB  vs.  Nordnet AB

Truecaller AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Truecaller AB are ranked lower than 9 (%) 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.

Nordnet AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordnet AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nordnet AB 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 Truecaller and Nordnet AB

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

The idea behind Truecaller AB and Nordnet 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.