Correlation Between Vontobel Holding and Tecan Group

Can any of the company-specific risk be diversified away by investing in both Vontobel Holding and Tecan Group 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 Vontobel Holding and Tecan Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vontobel Holding and Tecan Group AG, you can compare the effects of market volatilities on Vontobel Holding and Tecan Group 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 Vontobel Holding with a short position of Tecan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vontobel Holding and Tecan Group.

Diversification Opportunities for Vontobel Holding and Tecan Group

-0.63

Correlation Coefficient

Vontobel Holding  Tecan Group

Excellent diversification

The 3 months correlation between Vontobel and Tecan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vontobel Holding and Tecan Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecan Group AG and Vontobel Holding 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 Vontobel Holding are associated (or correlated) with Tecan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecan Group AG has no effect on the direction of Vontobel Holding i.e., Vontobel Holding and Tecan Group go up and down completely randomly.

Pair Corralation between Vontobel Holding and Tecan Group

Assuming the 90 days trading horizon Vontobel Holding is expected to generate 0.59 times more return on investment than Tecan Group. However, Vontobel Holding is 1.7 times less risky than Tecan Group. It trades about 0.03 of its potential returns per unit of risk. Tecan Group AG is currently generating about -0.05 per unit of risk. If you would invest  5,749  in Vontobel Holding on October 10, 2024 and sell it today you would earn a total of  801.00  from holding Vontobel Holding or generate 13.93% return on investment over 90 days.

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

Vontobel Holding  vs.  Tecan Group AG

Vontobel Holding

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vontobel Holding are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Vontobel Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Tecan Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tecan Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Vontobel Holding and Tecan Group

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

The idea behind Vontobel Holding and Tecan Group AG 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.