Correlation Between Teledyne Technologies and Bonso Electronics

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

By analyzing existing cross correlation between Teledyne Technologies Incorporated and Bonso Electronics International, you can compare the effects of market volatilities on Teledyne Technologies and Bonso Electronics 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 Teledyne Technologies with a short position of Bonso Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teledyne Technologies and Bonso Electronics.

Diversification Opportunities for Teledyne Technologies and Bonso Electronics

-0.75

Correlation Coefficient

Teledyne Technologies  Bonso Electronics

Pay attention - limited upside

The 3 months correlation between Teledyne and Bonso is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Teledyne Technologies Incorpor and Bonso Electronics Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonso Electronics and Teledyne 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 Teledyne Technologies Incorporated are associated (or correlated) with Bonso Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonso Electronics has no effect on the direction of Teledyne Technologies i.e., Teledyne Technologies and Bonso Electronics go up and down completely randomly.

Pair Corralation between Teledyne Technologies and Bonso Electronics

If you would invest  43,047  in Teledyne Technologies Incorporated on September 5, 2024 and sell it today you would earn a total of  4,805  from holding Teledyne Technologies Incorporated or generate 11.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Teledyne Technologies Incorpor  vs.  Bonso Electronics Internationa

Teledyne Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Teledyne Technologies Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Teledyne Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bonso Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonso Electronics International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bonso Electronics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Teledyne Technologies and Bonso Electronics

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

The idea behind Teledyne Technologies Incorporated and Bonso Electronics International 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.