Correlation Between Tecnoglass and Taiga Building

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

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

Diversification Opportunities for Tecnoglass and Taiga Building

-0.12

Correlation Coefficient

Tecnoglass  Taiga Building

Good diversification

The 3 months correlation between Tecnoglass and Taiga is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tecnoglass and Taiga Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiga Building Products and Tecnoglass 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 Tecnoglass are associated (or correlated) with Taiga Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiga Building Products has no effect on the direction of Tecnoglass i.e., Tecnoglass and Taiga Building go up and down completely randomly.

Pair Corralation between Tecnoglass and Taiga Building

Given the investment horizon of 90 days Tecnoglass is expected to under-perform the Taiga Building. In addition to that, Tecnoglass is 2.0 times more volatile than Taiga Building Products. It trades about -0.07 of its total potential returns per unit of risk. Taiga Building Products is currently generating about 0.04 per unit of volatility. If you would invest  260.00  in Taiga Building Products on December 29, 2024 and sell it today you would earn a total of  7.00  from holding Taiga Building Products or generate 2.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Tecnoglass  vs.  Taiga Building Products

Tecnoglass

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tecnoglass has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Taiga Building Products

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taiga Building Products are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Taiga Building is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tecnoglass and Taiga Building

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

The idea behind Tecnoglass and Taiga Building Products 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.