Correlation Between CodeMill and Truecaller

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

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

Diversification Opportunities for CodeMill and Truecaller

-0.37

Correlation Coefficient

CodeMill  Truecaller

Very good diversification

The 3 months correlation between CodeMill and Truecaller is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CodeMill AB and Truecaller AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truecaller AB and CodeMill 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 CodeMill AB are associated (or correlated) with Truecaller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truecaller AB has no effect on the direction of CodeMill i.e., CodeMill and Truecaller go up and down completely randomly.

Pair Corralation between CodeMill and Truecaller

Assuming the 90 days trading horizon CodeMill AB is expected to generate 0.67 times more return on investment than Truecaller. However, CodeMill AB is 1.5 times less risky than Truecaller. It trades about 0.16 of its potential returns per unit of risk. Truecaller AB is currently generating about -0.06 per unit of risk. If you would invest  1,506  in CodeMill AB on April 22, 2025 and sell it today you would earn a total of  264.00  from holding CodeMill AB or generate 17.53% return on investment over 90 days.

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

CodeMill AB  vs.  Truecaller AB

CodeMill AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CodeMill AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CodeMill unveiled solid returns over the last few months and may actually be approaching a breakup point.

Truecaller AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Truecaller AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Pair Trading with CodeMill and Truecaller

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

The idea behind CodeMill AB and Truecaller 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.