Correlation Between NCAB and Troax Group

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

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

Diversification Opportunities for NCAB and Troax Group

0.21

Correlation Coefficient

NCAB  Troax Group

Modest diversification

The 3 months correlation between NCAB and Troax is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NCAB Group and Troax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troax Group AB and NCAB 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 NCAB Group are associated (or correlated) with Troax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troax Group AB has no effect on the direction of NCAB i.e., NCAB and Troax Group go up and down completely randomly.

Pair Corralation between NCAB and Troax Group

Assuming the 90 days trading horizon NCAB Group is expected to generate 1.59 times more return on investment than Troax Group. However, NCAB is 1.59 times more volatile than Troax Group AB. It trades about 0.07 of its potential returns per unit of risk. Troax Group AB is currently generating about 0.03 per unit of risk. If you would invest  4,694  in NCAB Group on April 24, 2025 and sell it today you would earn a total of  646.00  from holding NCAB Group or generate 13.76% return on investment over 90 days.

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

NCAB Group  vs.  Troax Group AB

NCAB Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NCAB Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NCAB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Troax Group AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Troax Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Troax Group 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 NCAB and Troax Group

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

The idea behind NCAB Group and Troax Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.