Correlation Between Teixeira Duarte and Martifer SGPS

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

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

Diversification Opportunities for Teixeira Duarte and Martifer SGPS

0.12

Correlation Coefficient

Teixeira Duarte  Martifer SGPS

Average diversification

The 3 months correlation between Teixeira and Martifer is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Teixeira Duarte and Martifer SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martifer SGPS SA and Teixeira Duarte 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 Teixeira Duarte are associated (or correlated) with Martifer SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martifer SGPS SA has no effect on the direction of Teixeira Duarte i.e., Teixeira Duarte and Martifer SGPS go up and down completely randomly.

Pair Corralation between Teixeira Duarte and Martifer SGPS

Assuming the 90 days trading horizon Teixeira Duarte is expected to under-perform the Martifer SGPS. But the stock apears to be less risky and, when comparing its historical volatility, Teixeira Duarte is 1.02 times less risky than Martifer SGPS. The stock trades about -0.14 of its potential returns per unit of risk. The Martifer SGPS SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  173.00  in Martifer SGPS SA on September 5, 2024 and sell it today you would earn a total of  2.00  from holding Martifer SGPS SA or generate 1.16% return on investment over 90 days.

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

Teixeira Duarte  vs.  Martifer SGPS SA

Teixeira Duarte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teixeira Duarte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Martifer SGPS SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Martifer SGPS SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Martifer SGPS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Teixeira Duarte and Martifer SGPS

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

The idea behind Teixeira Duarte and Martifer SGPS 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.