Correlation Between Tecan Group and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Tecan Group and Lonza 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 Tecan Group and Lonza Group 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 Lonza Group AG, you can compare the effects of market volatilities on Tecan Group and Lonza 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 Tecan Group with a short position of Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecan Group and Lonza Group.
Diversification Opportunities for Tecan Group and Lonza Group
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tecan and Lonza is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tecan Group AG and Lonza Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group AG 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 Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group AG has no effect on the direction of Tecan Group i.e., Tecan Group and Lonza Group go up and down completely randomly.
Pair Corralation between Tecan Group and Lonza Group
Assuming the 90 days trading horizon Tecan Group AG is expected to under-perform the Lonza Group. But the stock apears to be less risky and, when comparing its historical volatility, Tecan Group AG is 2.08 times less risky than Lonza Group. The stock trades about -0.16 of its potential returns per unit of risk. The Lonza Group AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 53,260 in Lonza Group AG on September 1, 2024 and sell it today you would lose (620.00) from holding Lonza Group AG or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tecan Group AG vs. Lonza Group AG
Performance |
| Timeline |
| Tecan Group AG |
| Lonza Group AG |
Tecan Group and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tecan Group and Lonza Group
The main advantage of trading using opposite Tecan Group and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tecan Group position performs unexpectedly, Lonza 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 Lonza Group will offset losses from the drop in Lonza Group'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 |
| Lonza Group vs. Sika AG | Lonza Group vs. Givaudan SA | Lonza Group vs. Geberit AG | Lonza Group vs. Swiss Life Holding |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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