Correlation Between Straumann Holding and Temenos Group
Can any of the company-specific risk be diversified away by investing in both Straumann Holding and Temenos Group 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 Straumann Holding and Temenos Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Temenos Group AG, you can compare the effects of market volatilities on Straumann Holding and Temenos Group 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 Straumann Holding with a short position of Temenos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Temenos Group.
Diversification Opportunities for Straumann Holding and Temenos Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Straumann and Temenos is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Temenos Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Temenos Group AG and Straumann Holding 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 Straumann Holding AG are associated (or correlated) with Temenos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Temenos Group AG has no effect on the direction of Straumann Holding i.e., Straumann Holding and Temenos Group go up and down completely randomly.
Pair Corralation between Straumann Holding and Temenos Group
Assuming the 90 days trading horizon Straumann Holding AG is expected to under-perform the Temenos Group. In addition to that, Straumann Holding is 1.51 times more volatile than Temenos Group AG. It trades about -0.1 of its total potential returns per unit of risk. Temenos Group AG is currently generating about -0.03 per unit of volatility. If you would invest 7,600 in Temenos Group AG on November 27, 2024 and sell it today you would lose (80.00) from holding Temenos Group AG or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Straumann Holding AG vs. Temenos Group AG
Performance |
| Timeline |
| Straumann Holding |
| Temenos Group AG |
Straumann Holding and Temenos Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Temenos Group
The main advantage of trading using opposite Straumann Holding and Temenos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding position performs unexpectedly, Temenos Group 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 Temenos Group will offset losses from the drop in Temenos Group's long position.| Straumann Holding vs. Sonova H Ag | Straumann Holding vs. Sika AG | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. Givaudan 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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