Correlation Between Technos SA and Adobe

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

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

Diversification Opportunities for Technos SA and Adobe

0.09

Correlation Coefficient

Technos SA  Adobe

Significant diversification

The 3 months correlation between Technos and Adobe is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Technos SA and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and Technos 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 Technos SA are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of Technos SA i.e., Technos SA and Adobe go up and down completely randomly.

Pair Corralation between Technos SA and Adobe

Assuming the 90 days trading horizon Technos SA is expected to generate 0.96 times more return on investment than Adobe. However, Technos SA is 1.05 times less risky than Adobe. It trades about 0.05 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.15 per unit of risk. If you would invest  516.00  in Technos SA on December 22, 2024 and sell it today you would earn a total of  25.00  from holding Technos SA or generate 4.84% return on investment over 90 days.

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

Technos SA  vs.  Adobe Inc

Technos SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Technos SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Technos SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Adobe Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Technos SA and Adobe

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

The idea behind Technos SA and Adobe Inc 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.