Correlation Between Makalot Industrial and TECO Electric

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

By analyzing existing cross correlation between Makalot Industrial Co and TECO Electric Machinery, you can compare the effects of market volatilities on Makalot Industrial and TECO Electric 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 Makalot Industrial with a short position of TECO Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makalot Industrial and TECO Electric.

Diversification Opportunities for Makalot Industrial and TECO Electric

-0.79

Correlation Coefficient

Makalot Industrial  TECO Electric

Pay attention - limited upside

The 3 months correlation between Makalot and TECO is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Makalot Industrial Co and TECO Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECO Electric Machinery and Makalot Industrial 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 Makalot Industrial Co are associated (or correlated) with TECO Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECO Electric Machinery has no effect on the direction of Makalot Industrial i.e., Makalot Industrial and TECO Electric go up and down completely randomly.

Pair Corralation between Makalot Industrial and TECO Electric

Assuming the 90 days trading horizon Makalot Industrial Co is expected to under-perform the TECO Electric. In addition to that, Makalot Industrial is 1.14 times more volatile than TECO Electric Machinery. It trades about -0.17 of its total potential returns per unit of risk. TECO Electric Machinery is currently generating about 0.01 per unit of volatility. If you would invest  5,150  in TECO Electric Machinery on September 15, 2024 and sell it today you would earn a total of  0.00  from holding TECO Electric Machinery or generate 0.0% return on investment over 90 days.

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

Makalot Industrial Co  vs.  TECO Electric Machinery

Makalot Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Makalot Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

TECO Electric Machinery

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TECO Electric Machinery are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, TECO Electric is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Makalot Industrial and TECO Electric

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

The idea behind Makalot Industrial Co and TECO Electric Machinery 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.