Correlation Between GlucoTrack and Tevano Systems

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

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

Diversification Opportunities for GlucoTrack and Tevano Systems

0.85

Correlation Coefficient

GlucoTrack  Tevano Systems

Very poor diversification

The 3 months correlation between GlucoTrack and Tevano is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GlucoTrack and Tevano Systems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tevano Systems Holdings and GlucoTrack 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 GlucoTrack are associated (or correlated) with Tevano Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tevano Systems Holdings has no effect on the direction of GlucoTrack i.e., GlucoTrack and Tevano Systems go up and down completely randomly.

Pair Corralation between GlucoTrack and Tevano Systems

Given the investment horizon of 90 days GlucoTrack is expected to under-perform the Tevano Systems. But the stock apears to be less risky and, when comparing its historical volatility, GlucoTrack is 1.06 times less risky than Tevano Systems. The stock trades about -0.2 of its potential returns per unit of risk. The Tevano Systems Holdings is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1.57  in Tevano Systems Holdings on September 2, 2024 and sell it today you would lose (1.57) from holding Tevano Systems Holdings or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

GlucoTrack  vs.  Tevano Systems Holdings

GlucoTrack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GlucoTrack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Tevano Systems Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tevano Systems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic 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.

Pair Trading with GlucoTrack and Tevano Systems

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

The idea behind GlucoTrack and Tevano Systems Holdings 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.

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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.