Correlation Between Belimo Holding and Tecan Group

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

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

Diversification Opportunities for Belimo Holding and Tecan Group

0.71

Correlation Coefficient

Belimo Holding  Tecan Group

Poor diversification

The 3 months correlation between Belimo and Tecan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Belimo Holding and Tecan Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecan Group AG and Belimo Holding 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 Belimo Holding are associated (or correlated) with Tecan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecan Group AG has no effect on the direction of Belimo Holding i.e., Belimo Holding and Tecan Group go up and down completely randomly.

Pair Corralation between Belimo Holding and Tecan Group

Assuming the 90 days trading horizon Belimo Holding is expected to generate 1.19 times more return on investment than Tecan Group. However, Belimo Holding is 1.19 times more volatile than Tecan Group AG. It trades about -0.03 of its potential returns per unit of risk. Tecan Group AG is currently generating about -0.14 per unit of risk. If you would invest  59,800  in Belimo Holding on December 22, 2024 and sell it today you would lose (2,800) from holding Belimo Holding or give up 4.68% of portfolio value over 90 days.

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

Belimo Holding  vs.  Tecan Group AG

Belimo Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belimo Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Belimo Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tecan Group AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tecan Group AG 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Belimo Holding and Tecan Group

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

The idea behind Belimo Holding and Tecan Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.