Correlation Between Vastned Retail and TBC Bank

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

By analyzing existing cross correlation between Vastned Retail NV and TBC Bank Group, you can compare the effects of market volatilities on Vastned Retail and TBC Bank 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 Vastned Retail with a short position of TBC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and TBC Bank.

Diversification Opportunities for Vastned Retail and TBC Bank

-0.23

Correlation Coefficient

Vastned Retail  TBC Bank

Very good diversification

The 3 months correlation between Vastned and TBC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and TBC Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBC Bank Group and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with TBC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBC Bank Group has no effect on the direction of Vastned Retail i.e., Vastned Retail and TBC Bank go up and down completely randomly.

Pair Corralation between Vastned Retail and TBC Bank

Assuming the 90 days trading horizon Vastned Retail NV is expected to under-perform the TBC Bank. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 2.45 times less risky than TBC Bank. The stock trades about -0.05 of its potential returns per unit of risk. The TBC Bank Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  253,500  in TBC Bank Group on October 9, 2024 and sell it today you would earn a total of  58,500  from holding TBC Bank Group or generate 23.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Vastned Retail NV  vs.  TBC Bank Group

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vastned Retail is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

TBC Bank Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TBC Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vastned Retail and TBC Bank

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

The idea behind Vastned Retail NV and TBC Bank Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.