Correlation Between Troax Group and Vimian Group

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

Diversification Opportunities for Troax Group and Vimian Group

0.61

Correlation Coefficient

Troax Group  Vimian Group

Poor diversification

The 3 months correlation between Troax and Vimian is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Troax Group AB and Vimian Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vimian Group 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 Vimian Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vimian Group AB has no effect on the direction of Troax Group i.e., Troax Group and Vimian Group go up and down completely randomly.

Pair Corralation between Troax Group and Vimian Group

Assuming the 90 days trading horizon Troax Group is expected to generate 24.39 times less return on investment than Vimian Group. But when comparing it to its historical volatility, Troax Group AB is 1.29 times less risky than Vimian Group. It trades about 0.0 of its potential returns per unit of risk. Vimian Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,542  in Vimian Group AB on April 22, 2025 and sell it today you would earn a total of  182.00  from holding Vimian Group AB or generate 5.14% return on investment over 90 days.

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

Troax Group AB  vs.  Vimian Group 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Vimian Group AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vimian Group AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Vimian Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Troax Group and Vimian Group

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

The idea behind Troax Group AB and Vimian 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.