Correlation Between Major Drilling and TeamViewer

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

By analyzing existing cross correlation between Major Drilling Group and TeamViewer AG, you can compare the effects of market volatilities on Major Drilling and TeamViewer 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 Major Drilling with a short position of TeamViewer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and TeamViewer.

Diversification Opportunities for Major Drilling and TeamViewer

-0.03

Correlation Coefficient

Major Drilling  TeamViewer

Good diversification

The 3 months correlation between Major and TeamViewer is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and TeamViewer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TeamViewer AG and Major Drilling 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 Major Drilling Group are associated (or correlated) with TeamViewer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TeamViewer AG has no effect on the direction of Major Drilling i.e., Major Drilling and TeamViewer go up and down completely randomly.

Pair Corralation between Major Drilling and TeamViewer

Assuming the 90 days horizon Major Drilling Group is expected to under-perform the TeamViewer. In addition to that, Major Drilling is 1.05 times more volatile than TeamViewer AG. It trades about -0.06 of its total potential returns per unit of risk. TeamViewer AG is currently generating about 0.19 per unit of volatility. If you would invest  960.00  in TeamViewer AG on December 24, 2024 and sell it today you would earn a total of  278.00  from holding TeamViewer AG or generate 28.96% return on investment over 90 days.

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

Major Drilling Group  vs.  TeamViewer AG

Major Drilling Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Major Drilling Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TeamViewer AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TeamViewer AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, TeamViewer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Major Drilling and TeamViewer

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

The idea behind Major Drilling Group and TeamViewer AG 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 Stocks Directory module to find actively traded stocks across global markets.