Correlation Between Technos SA and Jefferies Financial

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

By analyzing existing cross correlation between Technos SA and Jefferies Financial Group, you can compare the effects of market volatilities on Technos SA and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technos SA and Jefferies Financial.

Diversification Opportunities for Technos SA and Jefferies Financial

0.11

Correlation Coefficient

Technos SA  Jefferies Financial

Average diversification

The 3 months correlation between Technos and Jefferies is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Technos SA and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Technos SA i.e., Technos SA and Jefferies Financial go up and down completely randomly.

Pair Corralation between Technos SA and Jefferies Financial

Assuming the 90 days trading horizon Technos SA is expected to generate 0.79 times more return on investment than Jefferies Financial. However, Technos SA is 1.27 times less risky than Jefferies Financial. It trades about 0.02 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about -0.04 per unit of risk. If you would invest  539.00  in Technos SA on October 22, 2024 and sell it today you would earn a total of  3.00  from holding Technos SA or generate 0.56% 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.  Jefferies Financial Group

Technos SA

Risk-Adjusted Performance

0 of 100

Weak

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

Jefferies Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jefferies Financial Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Jefferies Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Technos SA and Jefferies Financial

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

The idea behind Technos SA and Jefferies Financial Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.