Correlation Between Tat Techno and Chocoladefabriken

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

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

Diversification Opportunities for Tat Techno and Chocoladefabriken

-0.35

Correlation Coefficient

Tat Techno  Chocoladefabriken

Very good diversification

The 3 months correlation between Tat and Chocoladefabriken is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Tat Techno 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 Tat Techno are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Tat Techno i.e., Tat Techno and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Tat Techno and Chocoladefabriken

Given the investment horizon of 90 days Tat Techno is expected to generate 88.55 times less return on investment than Chocoladefabriken. In addition to that, Tat Techno is 1.27 times more volatile than Chocoladefabriken Lindt Sprngli. It trades about 0.0 of its total potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about 0.13 per unit of volatility. If you would invest  1,095  in Chocoladefabriken Lindt Sprngli on December 22, 2024 and sell it today you would earn a total of  245.00  from holding Chocoladefabriken Lindt Sprngli or generate 22.37% return on investment over 90 days.

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

Tat Techno  vs.  Chocoladefabriken Lindt Sprngl

Tat Techno

Risk-Adjusted Performance

Very Weak

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

Chocoladefabriken Lindt

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chocoladefabriken Lindt Sprngli are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chocoladefabriken showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tat Techno and Chocoladefabriken

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

The idea behind Tat Techno and Chocoladefabriken Lindt Sprngli 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.