Correlation Between New Tech and Biztech Konsulting
Can any of the company-specific risk be diversified away by investing in both New Tech and Biztech Konsulting 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 New Tech and Biztech Konsulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Tech Capital and Biztech Konsulting SA, you can compare the effects of market volatilities on New Tech and Biztech Konsulting 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 New Tech with a short position of Biztech Konsulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Tech and Biztech Konsulting.
Diversification Opportunities for New Tech and Biztech Konsulting
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Biztech is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding New Tech Capital and Biztech Konsulting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biztech Konsulting and New Tech 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 New Tech Capital are associated (or correlated) with Biztech Konsulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biztech Konsulting has no effect on the direction of New Tech i.e., New Tech and Biztech Konsulting go up and down completely randomly.
Pair Corralation between New Tech and Biztech Konsulting
Assuming the 90 days trading horizon New Tech Capital is expected to generate 1.03 times more return on investment than Biztech Konsulting. However, New Tech is 1.03 times more volatile than Biztech Konsulting SA. It trades about 0.02 of its potential returns per unit of risk. Biztech Konsulting SA is currently generating about 0.02 per unit of risk. If you would invest 90.00 in New Tech Capital on September 4, 2024 and sell it today you would lose (4.00) from holding New Tech Capital or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.28% |
| Values | Daily Returns |
New Tech Capital vs. Biztech Konsulting SA
Performance |
| Timeline |
| New Tech Capital |
| Biztech Konsulting |
New Tech and Biztech Konsulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Tech and Biztech Konsulting
The main advantage of trading using opposite New Tech and Biztech Konsulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Tech position performs unexpectedly, Biztech Konsulting 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 Biztech Konsulting will offset losses from the drop in Biztech Konsulting's long position.| New Tech vs. Carlson Investments SA | New Tech vs. Skyline Investment SA | New Tech vs. UniCredit SpA | New Tech vs. Noble Financials SA |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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