Correlation Between Teka Tecelagem and AbbVie

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

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

Diversification Opportunities for Teka Tecelagem and AbbVie

-0.68

Correlation Coefficient

Teka Tecelagem  AbbVie

Excellent diversification

The 3 months correlation between Teka and AbbVie is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Teka Tecelagem Kuehnrich and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie Inc and Teka Tecelagem 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 Teka Tecelagem Kuehnrich are associated (or correlated) with AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of Teka Tecelagem i.e., Teka Tecelagem and AbbVie go up and down completely randomly.

Pair Corralation between Teka Tecelagem and AbbVie

Assuming the 90 days trading horizon Teka Tecelagem is expected to generate 1.15 times less return on investment than AbbVie. But when comparing it to its historical volatility, Teka Tecelagem Kuehnrich is 1.24 times less risky than AbbVie. It trades about 0.21 of its potential returns per unit of risk. AbbVie Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  6,422  in AbbVie Inc on September 25, 2024 and sell it today you would earn a total of  510.00  from holding AbbVie Inc or generate 7.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Teka Tecelagem Kuehnrich  vs.  AbbVie Inc

Teka Tecelagem Kuehnrich

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teka Tecelagem Kuehnrich are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Teka Tecelagem is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AbbVie Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AbbVie Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, AbbVie may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Teka Tecelagem and AbbVie

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

The idea behind Teka Tecelagem Kuehnrich and AbbVie 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.