Correlation Between Thales and Made Tech
Can any of the company-specific risk be diversified away by investing in both Thales and Made Tech 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 Thales and Made Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thales and Made Tech Group, you can compare the effects of market volatilities on Thales and Made Tech 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 Thales with a short position of Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thales and Made Tech.
Diversification Opportunities for Thales and Made Tech
Good diversification
The 3 months correlation between Thales and Made is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Thales and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group and Thales 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 Thales are associated (or correlated) with Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Thales i.e., Thales and Made Tech go up and down completely randomly.
Pair Corralation between Thales and Made Tech
Assuming the 90 days trading horizon Thales is expected to under-perform the Made Tech. But the stock apears to be less risky and, when comparing its historical volatility, Thales is 2.5 times less risky than Made Tech. The stock trades about -0.04 of its potential returns per unit of risk. The Made Tech Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,850 in Made Tech Group on September 2, 2024 and sell it today you would earn a total of 450.00 from holding Made Tech Group or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thales vs. Made Tech Group
Performance |
| Timeline |
| Thales |
| Made Tech Group |
Thales and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thales and Made Tech
The main advantage of trading using opposite Thales and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thales position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Thales vs. Cizzle Biotechnology Holdings | Thales vs. Fevertree Drinks Plc | Thales vs. JLEN Environmental Assets | Thales vs. Batm Advanced Communications |
| Made Tech vs. Kaufman Et Broad | Made Tech vs. EVS Broadcast Equipment | Made Tech vs. Ecclesiastical Insurance Office | Made Tech vs. Gaztransport et Technigaz |
Check out your portfolio center.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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