Correlation Between TELES Informationstech and Corporate Travel

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

By analyzing existing cross correlation between TELES Informationstechnologien AG and Corporate Travel Management, you can compare the effects of market volatilities on TELES Informationstech and Corporate Travel 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 TELES Informationstech with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELES Informationstech and Corporate Travel.

Diversification Opportunities for TELES Informationstech and Corporate Travel

-0.55

Correlation Coefficient

TELES Informationstech  Corporate Travel

Excellent diversification

The 3 months correlation between TELES and Corporate is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and TELES Informationstech 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 TELES Informationstechnologien AG are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of TELES Informationstech i.e., TELES Informationstech and Corporate Travel go up and down completely randomly.

Pair Corralation between TELES Informationstech and Corporate Travel

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to under-perform the Corporate Travel. In addition to that, TELES Informationstech is 1.41 times more volatile than Corporate Travel Management. It trades about -0.13 of its total potential returns per unit of risk. Corporate Travel Management is currently generating about 0.03 per unit of volatility. If you would invest  750.00  in Corporate Travel Management on October 9, 2024 and sell it today you would earn a total of  15.00  from holding Corporate Travel Management or generate 2.0% return on investment over 90 days.

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

TELES Informationstechnologien  vs.  Corporate Travel Management

TELES Informationstech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TELES Informationstechnologien AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Corporate Travel Man

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Corporate Travel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TELES Informationstech and Corporate Travel

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

The idea behind TELES Informationstechnologien AG and Corporate Travel Management 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.