Correlation Between 5N Plus and Tecnoglass

Can any of the company-specific risk be diversified away by investing in both 5N Plus and Tecnoglass 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 5N Plus and Tecnoglass into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 5N Plus and Tecnoglass, you can compare the effects of market volatilities on 5N Plus and Tecnoglass 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 5N Plus with a short position of Tecnoglass. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5N Plus and Tecnoglass.

Diversification Opportunities for 5N Plus and Tecnoglass

-0.38

Correlation Coefficient

5N Plus  Tecnoglass

Very good diversification

The 3 months correlation between FPLSF and Tecnoglass is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding 5N Plus and Tecnoglass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecnoglass and 5N Plus 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 5N Plus are associated (or correlated) with Tecnoglass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecnoglass has no effect on the direction of 5N Plus i.e., 5N Plus and Tecnoglass go up and down completely randomly.

Pair Corralation between 5N Plus and Tecnoglass

Assuming the 90 days horizon 5N Plus is expected to generate 3.46 times more return on investment than Tecnoglass. However, 5N Plus is 3.46 times more volatile than Tecnoglass. It trades about 0.32 of its potential returns per unit of risk. Tecnoglass is currently generating about 0.06 per unit of risk. If you would invest  730.00  in 5N Plus on May 13, 2025 and sell it today you would earn a total of  379.00  from holding 5N Plus or generate 51.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

5N Plus  vs.  Tecnoglass

5N Plus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 5N Plus are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, 5N Plus reported solid returns over the last few months and may actually be approaching a breakup point.

Tecnoglass

Risk-Adjusted Performance

Weakest

Over the last 90 days Tecnoglass has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with 5N Plus and Tecnoglass

The main advantage of trading using opposite 5N Plus and Tecnoglass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5N Plus position performs unexpectedly, Tecnoglass 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 Tecnoglass will offset losses from the drop in Tecnoglass' long position.

The idea behind 5N Plus and Tecnoglass 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.