Correlation Between Tedea Technological and Unitronics

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

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

Diversification Opportunities for Tedea Technological and Unitronics

-0.04

Correlation Coefficient

Tedea Technological  Unitronics

Good diversification

The 3 months correlation between Tedea and Unitronics is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tedea Technological Developmen and Unitronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitronics and Tedea Technological 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 Tedea Technological Development are associated (or correlated) with Unitronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitronics has no effect on the direction of Tedea Technological i.e., Tedea Technological and Unitronics go up and down completely randomly.

Pair Corralation between Tedea Technological and Unitronics

Assuming the 90 days trading horizon Tedea Technological Development is expected to under-perform the Unitronics. But the stock apears to be less risky and, when comparing its historical volatility, Tedea Technological Development is 3.57 times less risky than Unitronics. The stock trades about 0.0 of its potential returns per unit of risk. The Unitronics is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  250,200  in Unitronics on October 25, 2024 and sell it today you would earn a total of  34,200  from holding Unitronics or generate 13.67% return on investment over 90 days.

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

Tedea Technological Developmen  vs.  Unitronics

Tedea Technological

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tedea Technological Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Unitronics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unitronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Unitronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tedea Technological and Unitronics

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

The idea behind Tedea Technological Development and Unitronics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.