Correlation Between Tecan Group and Inficon Holding
Can any of the company-specific risk be diversified away by investing in both Tecan Group and Inficon Holding 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 Tecan Group and Inficon Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tecan Group AG and Inficon Holding, you can compare the effects of market volatilities on Tecan Group and Inficon Holding 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 Tecan Group with a short position of Inficon Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecan Group and Inficon Holding.
Diversification Opportunities for Tecan Group and Inficon Holding
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tecan and Inficon is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tecan Group AG and Inficon Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inficon Holding and Tecan 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 Tecan Group AG are associated (or correlated) with Inficon Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inficon Holding has no effect on the direction of Tecan Group i.e., Tecan Group and Inficon Holding go up and down completely randomly.
Pair Corralation between Tecan Group and Inficon Holding
Assuming the 90 days trading horizon Tecan Group AG is expected to generate 0.77 times more return on investment than Inficon Holding. However, Tecan Group AG is 1.3 times less risky than Inficon Holding. It trades about -0.24 of its potential returns per unit of risk. Inficon Holding is currently generating about -0.24 per unit of risk. If you would invest 22,280 in Tecan Group AG on August 29, 2024 and sell it today you would lose (1,240) from holding Tecan Group AG or give up 5.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tecan Group AG vs. Inficon Holding
Performance |
| Timeline |
| Tecan Group AG |
| Inficon Holding |
Tecan Group and Inficon Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tecan Group and Inficon Holding
The main advantage of trading using opposite Tecan Group and Inficon Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tecan Group position performs unexpectedly, Inficon Holding 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 Inficon Holding will offset losses from the drop in Inficon Holding's long position.| Tecan Group vs. Straumann Holding AG | Tecan Group vs. Sonova H Ag | Tecan Group vs. VAT Group AG | Tecan Group vs. Lonza Group AG |
| Inficon Holding vs. VAT Group AG | Inficon Holding vs. Comet Holding AG | Inficon Holding vs. Belimo Holding | Inficon Holding vs. Bachem Holding AG |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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