Correlation Between SCHMID Group and Tat Techno
Can any of the company-specific risk be diversified away by investing in both SCHMID Group and Tat Techno 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 SCHMID Group and Tat Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCHMID Group NV and Tat Techno, you can compare the effects of market volatilities on SCHMID Group and Tat Techno 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 SCHMID Group with a short position of Tat Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHMID Group and Tat Techno.
Diversification Opportunities for SCHMID Group and Tat Techno
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SCHMID and Tat is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and Tat Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tat Techno and SCHMID Group 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 SCHMID Group NV are associated (or correlated) with Tat Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tat Techno has no effect on the direction of SCHMID Group i.e., SCHMID Group and Tat Techno go up and down completely randomly.
Pair Corralation between SCHMID Group and Tat Techno
Assuming the 90 days horizon SCHMID Group is expected to generate 1.07 times less return on investment than Tat Techno. In addition to that, SCHMID Group is 2.71 times more volatile than Tat Techno. It trades about 0.07 of its total potential returns per unit of risk. Tat Techno is currently generating about 0.21 per unit of volatility. If you would invest 1,857 in Tat Techno on August 28, 2024 and sell it today you would earn a total of 379.00 from holding Tat Techno or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
SCHMID Group NV vs. Tat Techno
Performance |
| Timeline |
| SCHMID Group NV |
| Tat Techno |
SCHMID Group and Tat Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCHMID Group and Tat Techno
The main advantage of trading using opposite SCHMID Group and Tat Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCHMID Group position performs unexpectedly, Tat Techno 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 Tat Techno will offset losses from the drop in Tat Techno's long position.| SCHMID Group vs. SEI Investments | SCHMID Group vs. Tenaris SA ADR | SCHMID Group vs. Drilling Tools International | SCHMID Group vs. Noble plc |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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