Correlation Between Orexo AB and Train Alliance

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Can any of the company-specific risk be diversified away by investing in both Orexo AB and Train Alliance 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 Orexo AB and Train Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orexo AB and Train Alliance Sweden, you can compare the effects of market volatilities on Orexo AB and Train Alliance 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 Orexo AB with a short position of Train Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orexo AB and Train Alliance.

Diversification Opportunities for Orexo AB and Train Alliance

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Orexo and Train is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Orexo AB and Train Alliance Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Train Alliance Sweden and Orexo 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 Orexo AB are associated (or correlated) with Train Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Train Alliance Sweden has no effect on the direction of Orexo AB i.e., Orexo AB and Train Alliance go up and down completely randomly.

Pair Corralation between Orexo AB and Train Alliance

Assuming the 90 days trading horizon Orexo AB is expected to generate 2.96 times more return on investment than Train Alliance. However, Orexo AB is 2.96 times more volatile than Train Alliance Sweden. It trades about 0.03 of its potential returns per unit of risk. Train Alliance Sweden is currently generating about 0.06 per unit of risk. If you would invest  2,480  in Orexo AB on September 7, 2025 and sell it today you would earn a total of  20.00  from holding Orexo AB or generate 0.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Orexo AB  vs.  Train Alliance Sweden

 Performance 
       Timeline  
Orexo AB 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Orexo AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Orexo AB may actually be approaching a critical reversion point that can send shares even higher in January 2026.
Train Alliance Sweden 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Train Alliance Sweden are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Train Alliance may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Orexo AB and Train Alliance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Orexo AB and Train Alliance

The main advantage of trading using opposite Orexo AB and Train Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orexo AB position performs unexpectedly, Train Alliance 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 Train Alliance will offset losses from the drop in Train Alliance's long position.
The idea behind Orexo AB and Train Alliance Sweden 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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