Correlation Between Technos SA and Mosaic

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

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

Diversification Opportunities for Technos SA and Mosaic

0.34

Correlation Coefficient

Technos SA  Mosaic

Weak diversification

The 3 months correlation between Technos and Mosaic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Technos SA and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Technos SA i.e., Technos SA and Mosaic go up and down completely randomly.

Pair Corralation between Technos SA and Mosaic

Assuming the 90 days trading horizon Technos SA is expected to generate 1.49 times more return on investment than Mosaic. However, Technos SA is 1.49 times more volatile than The Mosaic. It trades about 0.06 of its potential returns per unit of risk. The Mosaic is currently generating about -0.01 per unit of risk. If you would invest  453.00  in Technos SA on September 26, 2024 and sell it today you would earn a total of  86.00  from holding Technos SA or generate 18.98% return on investment over 90 days.

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

Technos SA  vs.  The Mosaic

Technos SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Technos SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Technos SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mosaic

Risk-Adjusted Performance

3 of 100

Modest

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

Pair Trading with Technos SA and Mosaic

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

The idea behind Technos SA and The Mosaic 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.