Correlation Between PBG SA and Technos SA

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

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

Diversification Opportunities for PBG SA and Technos SA

-0.48

Correlation Coefficient

PBG SA  Technos SA

Very good diversification

The 3 months correlation between PBG and Technos is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PBG SA and Technos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technos SA and PBG SA 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 PBG SA are associated (or correlated) with Technos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technos SA has no effect on the direction of PBG SA i.e., PBG SA and Technos SA go up and down completely randomly.

Pair Corralation between PBG SA and Technos SA

Assuming the 90 days trading horizon PBG SA is expected to under-perform the Technos SA. But the stock apears to be less risky and, when comparing its historical volatility, PBG SA is 1.17 times less risky than Technos SA. The stock trades about -0.12 of its potential returns per unit of risk. The Technos SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  504.00  in Technos SA on September 19, 2024 and sell it today you would earn a total of  55.00  from holding Technos SA or generate 10.91% return on investment over 90 days.

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

PBG SA  vs.  Technos SA

PBG SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PBG SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Technos SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Technos SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Technos SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PBG SA and Technos SA

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

The idea behind PBG SA and Technos SA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.