Correlation Between Acroud AB and Tangiamo Touch

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

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

Diversification Opportunities for Acroud AB and Tangiamo Touch

0.72

Correlation Coefficient

Acroud AB  Tangiamo Touch

Poor diversification

The 3 months correlation between Acroud and Tangiamo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Acroud AB and Tangiamo Touch Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangiamo Touch Technology and Acroud AB 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 Acroud AB are associated (or correlated) with Tangiamo Touch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangiamo Touch Technology has no effect on the direction of Acroud AB i.e., Acroud AB and Tangiamo Touch go up and down completely randomly.

Pair Corralation between Acroud AB and Tangiamo Touch

Assuming the 90 days trading horizon Acroud AB is expected to under-perform the Tangiamo Touch. But the stock apears to be less risky and, when comparing its historical volatility, Acroud AB is 2.13 times less risky than Tangiamo Touch. The stock trades about -0.17 of its potential returns per unit of risk. The Tangiamo Touch Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1.18  in Tangiamo Touch Technology on February 5, 2024 and sell it today you would lose (0.02) from holding Tangiamo Touch Technology or give up 1.69% of portfolio value over 90 days.

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

Acroud AB  vs.  Tangiamo Touch Technology

Acroud AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acroud AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Tangiamo Touch Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tangiamo Touch Technology 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 forward indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Acroud AB and Tangiamo Touch

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

The idea behind Acroud AB and Tangiamo Touch Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.