Correlation Between Optronics Technologies and Trastor Real

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

By analyzing existing cross correlation between Optronics Technologies SA and Trastor Real Estate, you can compare the effects of market volatilities on Optronics Technologies and Trastor Real 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 Optronics Technologies with a short position of Trastor Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optronics Technologies and Trastor Real.

Diversification Opportunities for Optronics Technologies and Trastor Real

-0.43

Correlation Coefficient

Optronics Technologies  Trastor Real

Very good diversification

The 3 months correlation between Optronics and Trastor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Optronics Technologies SA and Trastor Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trastor Real Estate and Optronics Technologies 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 Optronics Technologies SA are associated (or correlated) with Trastor Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trastor Real Estate has no effect on the direction of Optronics Technologies i.e., Optronics Technologies and Trastor Real go up and down completely randomly.

Pair Corralation between Optronics Technologies and Trastor Real

Assuming the 90 days trading horizon Optronics Technologies SA is expected to under-perform the Trastor Real. But the stock apears to be less risky and, when comparing its historical volatility, Optronics Technologies SA is 2.14 times less risky than Trastor Real. The stock trades about -0.13 of its potential returns per unit of risk. The Trastor Real Estate is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  106.00  in Trastor Real Estate on December 2, 2024 and sell it today you would earn a total of  23.00  from holding Trastor Real Estate or generate 21.7% return on investment over 90 days.

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

Optronics Technologies SA  vs.  Trastor Real Estate

Optronics Technologies

Risk-Adjusted Performance

Very Weak

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

Trastor Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trastor Real Estate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Trastor Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optronics Technologies and Trastor Real

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

The idea behind Optronics Technologies SA and Trastor Real Estate 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.