Correlation Between Catcher Technology and TPK Holding

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

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

Diversification Opportunities for Catcher Technology and TPK Holding

0.69

Correlation Coefficient

Catcher Technology  TPK Holding

Poor diversification

The 3 months correlation between Catcher and TPK is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and TPK Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPK Holding and Catcher Technology 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 Catcher Technology Co are associated (or correlated) with TPK Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPK Holding has no effect on the direction of Catcher Technology i.e., Catcher Technology and TPK Holding go up and down completely randomly.

Pair Corralation between Catcher Technology and TPK Holding

Assuming the 90 days trading horizon Catcher Technology is expected to generate 6.23 times less return on investment than TPK Holding. But when comparing it to its historical volatility, Catcher Technology Co is 1.56 times less risky than TPK Holding. It trades about 0.01 of its potential returns per unit of risk. TPK Holding Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,967  in TPK Holding Co on September 16, 2024 and sell it today you would earn a total of  928.00  from holding TPK Holding Co or generate 31.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.78%
Values	Daily Returns

Catcher Technology Co  vs.  TPK Holding Co

Catcher Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catcher Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

TPK Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TPK Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Catcher Technology and TPK Holding

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

The idea behind Catcher Technology Co and TPK Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.