Correlation Between Becle SA and Teijin

Can any of the company-specific risk be diversified away by investing in both Becle SA and Teijin 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 Becle SA and Teijin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Becle SA de and Teijin, you can compare the effects of market volatilities on Becle SA and Teijin 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 Becle SA with a short position of Teijin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becle SA and Teijin.

Diversification Opportunities for Becle SA and Teijin

0.88

Correlation Coefficient

Becle SA  Teijin

Very poor diversification

The 3 months correlation between Becle and Teijin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Becle SA de and Teijin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teijin and Becle SA 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 Becle SA de are associated (or correlated) with Teijin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teijin has no effect on the direction of Becle SA i.e., Becle SA and Teijin go up and down completely randomly.

Pair Corralation between Becle SA and Teijin

Assuming the 90 days horizon Becle SA de is expected to under-perform the Teijin. But the pink sheet apears to be less risky and, when comparing its historical volatility, Becle SA de is 1.0 times less risky than Teijin. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Teijin is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  967.00  in Teijin on September 15, 2024 and sell it today you would lose (117.00) from holding Teijin or give up 12.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Becle SA de  vs.  Teijin

Becle SA de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Becle SA de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Teijin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teijin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Becle SA and Teijin

The main advantage of trading using opposite Becle SA and Teijin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becle SA position performs unexpectedly, Teijin 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 Teijin will offset losses from the drop in Teijin's long position.

The idea behind Becle SA de and Teijin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.