Correlation Between Troax Group and Mycronic Publ

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

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

Diversification Opportunities for Troax Group and Mycronic Publ

0.2

Correlation Coefficient

Troax Group  Mycronic Publ

Modest diversification

The 3 months correlation between Troax and Mycronic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Mycronic publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mycronic publ AB and Troax Group 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 Troax Group AB are associated (or correlated) with Mycronic Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mycronic publ AB has no effect on the direction of Troax Group i.e., Troax Group and Mycronic Publ go up and down completely randomly.

Pair Corralation between Troax Group and Mycronic Publ

Assuming the 90 days trading horizon Troax Group is expected to generate 11.92 times less return on investment than Mycronic Publ. In addition to that, Troax Group is 1.35 times more volatile than Mycronic publ AB. It trades about 0.01 of its total potential returns per unit of risk. Mycronic publ AB is currently generating about 0.11 per unit of volatility. If you would invest  18,563  in Mycronic publ AB on April 23, 2025 and sell it today you would earn a total of  2,422  from holding Mycronic publ AB or generate 13.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Troax Group AB  vs.  Mycronic publ AB

Troax Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Troax Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Troax Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Mycronic publ AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mycronic publ AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mycronic Publ unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Troax Group and Mycronic Publ

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

The idea behind Troax Group AB and Mycronic publ 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.