Correlation Between First State and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both First State and Bechtle AG 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 First State and Bechtle AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and Bechtle AG, you can compare the effects of market volatilities on First State and Bechtle AG 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 First State with a short position of Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Bechtle AG.
Diversification Opportunities for First State and Bechtle AG
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Bechtle is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG and First State 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 First State Financial are associated (or correlated) with Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of First State i.e., First State and Bechtle AG go up and down completely randomly.
Pair Corralation between First State and Bechtle AG
Given the investment horizon of 90 days First State Financial is expected to generate 5.62 times more return on investment than Bechtle AG. However, First State is 5.62 times more volatile than Bechtle AG. It trades about 0.03 of its potential returns per unit of risk. Bechtle AG is currently generating about 0.0 per unit of risk. If you would invest 3.69 in First State Financial on November 18, 2025 and sell it today you would lose (1.74) from holding First State Financial or give up 47.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First State Financial vs. Bechtle AG
Performance |
| Timeline |
| First State Financial |
| Bechtle AG |
First State and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Bechtle AG
The main advantage of trading using opposite First State and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Bechtle AG 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 Bechtle AG will offset losses from the drop in Bechtle AG's long position.| First State vs. First Northern Community | First State vs. TISCO Financial Group | First State vs. Exchange Bank | First State vs. Merchants Financial Group |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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