Correlation Between TELES Informationstech and ASTRA INTERNATIONAL

Can any of the company-specific risk be diversified away by investing in both TELES Informationstech and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL, you can compare the effects of market volatilities on TELES Informationstech and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELES Informationstech and ASTRA INTERNATIONAL.

Diversification Opportunities for TELES Informationstech and ASTRA INTERNATIONAL

0.58

Correlation Coefficient

TELES Informationstech  ASTRA INTERNATIONAL

Very weak diversification

The 3 months correlation between TELES and ASTRA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien and ASTRA INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRA INTERNATIONAL has no effect on the direction of TELES Informationstech i.e., TELES Informationstech and ASTRA INTERNATIONAL go up and down completely randomly.

Pair Corralation between TELES Informationstech and ASTRA INTERNATIONAL

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to generate 1.19 times more return on investment than ASTRA INTERNATIONAL. However, TELES Informationstech is 1.19 times more volatile than ASTRA INTERNATIONAL. It trades about 0.04 of its potential returns per unit of risk. ASTRA INTERNATIONAL is currently generating about -0.14 per unit of risk. If you would invest  48.00  in TELES Informationstechnologien AG on December 1, 2024 and sell it today you would earn a total of  1.00  from holding TELES Informationstechnologien AG or generate 2.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

TELES Informationstechnologien  vs.  ASTRA INTERNATIONAL

TELES Informationstech

Risk-Adjusted Performance

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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ASTRA INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASTRA INTERNATIONAL 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with TELES Informationstech and ASTRA INTERNATIONAL

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

The idea behind TELES Informationstechnologien AG and ASTRA INTERNATIONAL 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.