Correlation Between TS Investment and LegoChem Biosciences

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

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

Diversification Opportunities for TS Investment and LegoChem Biosciences

0.0

Correlation Coefficient

TS Investment  LegoChem Biosciences

Pay attention - limited upside

The 3 months correlation between 246690 and LegoChem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and LegoChem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LegoChem Biosciences and TS Investment 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 TS Investment Corp are associated (or correlated) with LegoChem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LegoChem Biosciences has no effect on the direction of TS Investment i.e., TS Investment and LegoChem Biosciences go up and down completely randomly.

Pair Corralation between TS Investment and LegoChem Biosciences

If you would invest  99,300  in TS Investment Corp on October 27, 2024 and sell it today you would lose (2,700) from holding TS Investment Corp or give up 2.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TS Investment Corp  vs.  LegoChem Biosciences

TS Investment Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

LegoChem Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TS Investment and LegoChem Biosciences

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

The idea behind TS Investment Corp and LegoChem Biosciences 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.