Correlation Between Techtronic Industries and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Techtronic Industries and Straumann 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 Techtronic Industries and Straumann Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techtronic Industries and Straumann Holding AG, you can compare the effects of market volatilities on Techtronic Industries and Straumann 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 Techtronic Industries with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techtronic Industries and Straumann Holding.
Diversification Opportunities for Techtronic Industries and Straumann Holding
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Techtronic and Straumann is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Techtronic Industries and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Techtronic Industries 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 Techtronic Industries are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Techtronic Industries i.e., Techtronic Industries and Straumann Holding go up and down completely randomly.
Pair Corralation between Techtronic Industries and Straumann Holding
Assuming the 90 days horizon Techtronic Industries is expected to generate 1.28 times more return on investment than Straumann Holding. However, Techtronic Industries is 1.28 times more volatile than Straumann Holding AG. It trades about 0.32 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.27 per unit of risk. If you would invest 1,258 in Techtronic Industries on November 9, 2024 and sell it today you would earn a total of 203.00 from holding Techtronic Industries or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techtronic Industries vs. Straumann Holding AG
Performance |
| Timeline |
| Techtronic Industries |
| Straumann Holding |
Techtronic Industries and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techtronic Industries and Straumann Holding
The main advantage of trading using opposite Techtronic Industries and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techtronic Industries position performs unexpectedly, Straumann 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Techtronic Industries vs. Techtronic Industries Ltd | Techtronic Industries vs. SMC Corp | Techtronic Industries vs. Epiroc AB | Techtronic Industries vs. ABB |
| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Straumann Holding AG | Straumann Holding vs. Coloplast AS | Straumann Holding vs. Essilor International SA |
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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