Correlation Between Truecaller and Synsam AB

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

Diversification Opportunities for Truecaller and Synsam AB

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Truecaller and Synsam is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Truecaller AB and Synsam AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synsam 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 Synsam AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synsam AB has no effect on the direction of Truecaller i.e., Truecaller and Synsam AB go up and down completely randomly.

Pair Corralation between Truecaller and Synsam AB

Assuming the 90 days trading horizon Truecaller AB is expected to generate 1.25 times more return on investment than Synsam AB. However, Truecaller is 1.25 times more volatile than Synsam AB. It trades about 0.16 of its potential returns per unit of risk. Synsam AB is currently generating about -0.05 per unit of risk. If you would invest  3,960  in Truecaller AB on October 10, 2024 and sell it today you would earn a total of  1,065  from holding Truecaller AB or generate 26.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Truecaller AB  vs.  Synsam AB

 Performance 
       Timeline  
Truecaller AB 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Truecaller AB are ranked lower than 12 (%) 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.
Synsam AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Synsam AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Truecaller and Synsam AB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Truecaller and Synsam AB

The main advantage of trading using opposite Truecaller and Synsam AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truecaller position performs unexpectedly, Synsam 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 Synsam AB will offset losses from the drop in Synsam AB's long position.
The idea behind Truecaller AB and Synsam 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.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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