Correlation Between Knorr Bremse and TechnoPro Holdings
Can any of the company-specific risk be diversified away by investing in both Knorr Bremse and TechnoPro Holdings 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 Knorr Bremse and TechnoPro Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knorr Bremse Aktiengesellschaft and TechnoPro Holdings, you can compare the effects of market volatilities on Knorr Bremse and TechnoPro Holdings 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 Knorr Bremse with a short position of TechnoPro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knorr Bremse and TechnoPro Holdings.
Diversification Opportunities for Knorr Bremse and TechnoPro Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knorr and TechnoPro is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Knorr Bremse Aktiengesellschaf and TechnoPro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoPro Holdings and Knorr Bremse 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 Knorr Bremse Aktiengesellschaft are associated (or correlated) with TechnoPro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoPro Holdings has no effect on the direction of Knorr Bremse i.e., Knorr Bremse and TechnoPro Holdings go up and down completely randomly.
Pair Corralation between Knorr Bremse and TechnoPro Holdings
Assuming the 90 days horizon Knorr Bremse is expected to generate 20.99 times less return on investment than TechnoPro Holdings. But when comparing it to its historical volatility, Knorr Bremse Aktiengesellschaft is 1.29 times less risky than TechnoPro Holdings. It trades about 0.01 of its potential returns per unit of risk. TechnoPro Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 366.00 in TechnoPro Holdings on September 13, 2024 and sell it today you would earn a total of 11.00 from holding TechnoPro Holdings or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knorr Bremse Aktiengesellschaf vs. TechnoPro Holdings
Performance |
| Timeline |
| Knorr Bremse Aktieng |
| TechnoPro Holdings |
Knorr Bremse and TechnoPro Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knorr Bremse and TechnoPro Holdings
The main advantage of trading using opposite Knorr Bremse and TechnoPro Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knorr Bremse position performs unexpectedly, TechnoPro Holdings 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 TechnoPro Holdings will offset losses from the drop in TechnoPro Holdings' long position.| Knorr Bremse vs. 4 Less Group | Knorr Bremse vs. Foresight Autonomous Holdings | Knorr Bremse vs. Goodyear Tire Rubber | Knorr Bremse vs. Luminar Technologies |
| TechnoPro Holdings vs. Hire Technologies | TechnoPro Holdings vs. The Caldwell Partners | TechnoPro Holdings vs. Trucept | TechnoPro Holdings vs. Futuris Company |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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