Correlation Between Springs Global and Technos SA

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

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

Diversification Opportunities for Springs Global and Technos SA

0.0

Correlation Coefficient

Springs Global  Technos SA

Pay attention - limited upside

The 3 months correlation between Springs and Technos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Springs Global Participaes and Technos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technos SA and Springs Global 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 Springs Global Participaes 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 Springs Global i.e., Springs Global and Technos SA go up and down completely randomly.

Pair Corralation between Springs Global and Technos SA

If you would invest  528.00  in Technos SA on September 19, 2024 and sell it today you would earn a total of  31.00  from holding Technos SA or generate 5.87% return on investment over 90 days.

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

Springs Global Participaes  vs.  Technos SA

Springs Global Parti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Springs Global Participaes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Springs Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the 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 Springs Global and Technos SA

The main advantage of trading using opposite Springs Global and Technos SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Springs Global 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 Springs Global Participaes 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.