Correlation Between TELES Informationstech and Jacquet Metal

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

Diversification Opportunities for TELES Informationstech and Jacquet Metal

-0.1

Correlation Coefficient

TELES Informationstech  Jacquet Metal

Good diversification

The 3 months correlation between TELES and Jacquet is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of TELES Informationstech i.e., TELES Informationstech and Jacquet Metal go up and down completely randomly.

Pair Corralation between TELES Informationstech and Jacquet Metal

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to under-perform the Jacquet Metal. In addition to that, TELES Informationstech is 2.03 times more volatile than Jacquet Metal Service. It trades about -0.19 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.16 per unit of volatility. If you would invest  1,420  in Jacquet Metal Service on September 14, 2024 and sell it today you would earn a total of  224.00  from holding Jacquet Metal Service or generate 15.77% return on investment over 90 days.

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

TELES Informationstechnologien  vs.  Jacquet Metal Service

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

Jacquet Metal Service

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TELES Informationstech and Jacquet Metal

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

The idea behind TELES Informationstechnologien AG and Jacquet Metal Service 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.