Correlation Between Techtronic Industries and Ringmetall

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

By analyzing existing cross correlation between Techtronic Industries and Ringmetall SE, you can compare the effects of market volatilities on Techtronic Industries and Ringmetall 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 Ringmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techtronic Industries and Ringmetall.

Diversification Opportunities for Techtronic Industries and Ringmetall

-0.26

Correlation Coefficient

Techtronic Industries  Ringmetall

Very good diversification

The 3 months correlation between Techtronic and Ringmetall is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Techtronic Industries and Ringmetall SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ringmetall SE 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 Ringmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ringmetall SE has no effect on the direction of Techtronic Industries i.e., Techtronic Industries and Ringmetall go up and down completely randomly.

Pair Corralation between Techtronic Industries and Ringmetall

Assuming the 90 days trading horizon Techtronic Industries is expected to generate 0.53 times more return on investment than Ringmetall. However, Techtronic Industries is 1.88 times less risky than Ringmetall. It trades about 0.31 of its potential returns per unit of risk. Ringmetall SE is currently generating about 0.11 per unit of risk. If you would invest  913.00  in Techtronic Industries on April 22, 2025 and sell it today you would earn a total of  109.00  from holding Techtronic Industries or generate 11.94% return on investment over 90 days.

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

Techtronic Industries  vs.  Ringmetall SE

Techtronic Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Techtronic Industries are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Techtronic Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Ringmetall SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ringmetall SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Ringmetall may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Techtronic Industries and Ringmetall

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

The idea behind Techtronic Industries and Ringmetall SE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.