Correlation Between TCC Steel and Playgram

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

By analyzing existing cross correlation between TCC Steel Corp and Playgram Co, you can compare the effects of market volatilities on TCC Steel and Playgram 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 TCC Steel with a short position of Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCC Steel and Playgram.

Diversification Opportunities for TCC Steel and Playgram

0.12

Correlation Coefficient

TCC Steel  Playgram

Average diversification

The 3 months correlation between TCC and Playgram is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding TCC Steel Corp and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram and TCC Steel 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 TCC Steel Corp are associated (or correlated) with Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of TCC Steel i.e., TCC Steel and Playgram go up and down completely randomly.

Pair Corralation between TCC Steel and Playgram

Assuming the 90 days trading horizon TCC Steel Corp is expected to generate 1.46 times more return on investment than Playgram. However, TCC Steel is 1.46 times more volatile than Playgram Co. It trades about 0.0 of its potential returns per unit of risk. Playgram Co is currently generating about -0.06 per unit of risk. If you would invest  2,851,725  in TCC Steel Corp on December 24, 2024 and sell it today you would lose (141,725) from holding TCC Steel Corp or give up 4.97% of portfolio value over 90 days.

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

TCC Steel Corp  vs.  Playgram Co

TCC Steel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days TCC Steel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, TCC Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Playgram

Risk-Adjusted Performance

Very Weak

Over the last 90 days Playgram Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic 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 TCC Steel and Playgram

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

The idea behind TCC Steel Corp and Playgram Co 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.