Correlation Between TELES Informationstech and Wayside Technology

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

Diversification Opportunities for TELES Informationstech and Wayside Technology

0.29

Correlation Coefficient

TELES Informationstech  Wayside Technology

Modest diversification

The 3 months correlation between TELES and Wayside is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of TELES Informationstech i.e., TELES Informationstech and Wayside Technology go up and down completely randomly.

Pair Corralation between TELES Informationstech and Wayside Technology

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to under-perform the Wayside Technology. In addition to that, TELES Informationstech is 1.55 times more volatile than Wayside Technology Group. It trades about -0.07 of its total potential returns per unit of risk. Wayside Technology Group is currently generating about -0.08 per unit of volatility. If you would invest  12,181  in Wayside Technology Group on December 31, 2024 and sell it today you would lose (2,081) from holding Wayside Technology Group or give up 17.08% of portfolio value over 90 days.

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

TELES Informationstechnologien  vs.  Wayside Technology Group

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

Wayside Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wayside Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TELES Informationstech and Wayside Technology

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

The idea behind TELES Informationstechnologien AG and Wayside Technology Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.