Correlation Between Technomeca Aerospace and Catenon SA

Can any of the company-specific risk be diversified away by investing in both Technomeca Aerospace and Catenon SA 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 Technomeca Aerospace and Catenon SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Technomeca Aerospace SA and Catenon SA, you can compare the effects of market volatilities on Technomeca Aerospace and Catenon SA 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 Technomeca Aerospace with a short position of Catenon SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technomeca Aerospace and Catenon SA.

Diversification Opportunities for Technomeca Aerospace and Catenon SA

0.0

Correlation Coefficient

Technomeca Aerospace  Catenon SA

Pay attention - limited upside

The 3 months correlation between Technomeca and Catenon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Technomeca Aerospace SA and Catenon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catenon SA and Technomeca Aerospace 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 Technomeca Aerospace SA are associated (or correlated) with Catenon SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catenon SA has no effect on the direction of Technomeca Aerospace i.e., Technomeca Aerospace and Catenon SA go up and down completely randomly.

Pair Corralation between Technomeca Aerospace and Catenon SA

If you would invest  93.00  in Technomeca Aerospace SA on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Technomeca Aerospace SA or generate 0.0% return on investment over 90 days.

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

Technomeca Aerospace SA  vs.  Catenon SA

Technomeca Aerospace

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Technomeca Aerospace SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Technomeca Aerospace is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Catenon SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catenon SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Catenon SA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Technomeca Aerospace and Catenon SA

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

The idea behind Technomeca Aerospace SA and Catenon SA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..