Correlation Between TELES Informationstech and Coor Service

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

Diversification Opportunities for TELES Informationstech and Coor Service

0.14

Correlation Coefficient

TELES Informationstech  Coor Service

Average diversification

The 3 months correlation between TELES and Coor is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management 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 Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of TELES Informationstech i.e., TELES Informationstech and Coor Service go up and down completely randomly.

Pair Corralation between TELES Informationstech and Coor Service

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to under-perform the Coor Service. In addition to that, TELES Informationstech is 1.42 times more volatile than Coor Service Management. It trades about -0.04 of its total potential returns per unit of risk. Coor Service Management is currently generating about 0.04 per unit of volatility. If you would invest  284.00  in Coor Service Management on December 22, 2024 and sell it today you would earn a total of  15.00  from holding Coor Service Management or generate 5.28% return on investment over 90 days.

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

TELES Informationstechnologien  vs.  Coor Service Management

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 latest fragile performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Coor Service Management

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coor Service Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Coor Service may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TELES Informationstech and Coor Service

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

The idea behind TELES Informationstechnologien AG and Coor Service 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.

Check out your portfolio center.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.