Correlation Between Corporate Travel and FORTEC ELEKTRONIK

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

By analyzing existing cross correlation between Corporate Travel Management and FORTEC ELEKTRONIK, you can compare the effects of market volatilities on Corporate Travel and FORTEC ELEKTRONIK 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 Corporate Travel with a short position of FORTEC ELEKTRONIK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and FORTEC ELEKTRONIK.

Diversification Opportunities for Corporate Travel and FORTEC ELEKTRONIK

-0.49

Correlation Coefficient

Corporate Travel  FORTEC ELEKTRONIK

Very good diversification

The 3 months correlation between Corporate and FORTEC is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and FORTEC ELEKTRONIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTEC ELEKTRONIK and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with FORTEC ELEKTRONIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTEC ELEKTRONIK has no effect on the direction of Corporate Travel i.e., Corporate Travel and FORTEC ELEKTRONIK go up and down completely randomly.

Pair Corralation between Corporate Travel and FORTEC ELEKTRONIK

Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 0.83 times more return on investment than FORTEC ELEKTRONIK. However, Corporate Travel Management is 1.2 times less risky than FORTEC ELEKTRONIK. It trades about 0.06 of its potential returns per unit of risk. FORTEC ELEKTRONIK is currently generating about -0.03 per unit of risk. If you would invest  760.00  in Corporate Travel Management on December 23, 2024 and sell it today you would earn a total of  55.00  from holding Corporate Travel Management or generate 7.24% return on investment over 90 days.

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

Corporate Travel Management  vs.  FORTEC ELEKTRONIK

Corporate Travel Man

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Corporate Travel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FORTEC ELEKTRONIK

Risk-Adjusted Performance

Very Weak

Over the last 90 days FORTEC ELEKTRONIK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Corporate Travel and FORTEC ELEKTRONIK

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

The idea behind Corporate Travel Management and FORTEC ELEKTRONIK 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.