Correlation Between Technomeca Aerospace and Neinor Homes

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

Diversification Opportunities for Technomeca Aerospace and Neinor Homes

0.0

Correlation Coefficient

Technomeca Aerospace  Neinor Homes

Pay attention - limited upside

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

Pair Corralation between Technomeca Aerospace and Neinor Homes

If you would invest  1,280  in Neinor Homes SLU on September 5, 2024 and sell it today you would earn a total of  232.00  from holding Neinor Homes SLU or generate 18.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Technomeca Aerospace SA  vs.  Neinor Homes SLU

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Neinor Homes SLU

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neinor Homes SLU are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Neinor Homes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Technomeca Aerospace and Neinor Homes

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

The idea behind Technomeca Aerospace SA and Neinor Homes SLU 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.