Correlation Between Shenyang Blue and TPV Technology

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

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

Diversification Opportunities for Shenyang Blue and TPV Technology

0.21

Correlation Coefficient

Shenyang Blue  TPV Technology

Modest diversification

The 3 months correlation between Shenyang and TPV is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Blue Silver and TPV Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPV Technology and Shenyang Blue 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 Shenyang Blue Silver are associated (or correlated) with TPV Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPV Technology has no effect on the direction of Shenyang Blue i.e., Shenyang Blue and TPV Technology go up and down completely randomly.

Pair Corralation between Shenyang Blue and TPV Technology

Assuming the 90 days trading horizon Shenyang Blue Silver is expected to under-perform the TPV Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shenyang Blue Silver is 1.16 times less risky than TPV Technology. The stock trades about -0.24 of its potential returns per unit of risk. The TPV Technology Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  299.00  in TPV Technology Co on October 25, 2024 and sell it today you would lose (31.00) from holding TPV Technology Co or give up 10.37% of portfolio value over 90 days.

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

Shenyang Blue Silver  vs.  TPV Technology Co

Shenyang Blue Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenyang Blue Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TPV Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TPV Technology Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TPV Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenyang Blue and TPV Technology

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

The idea behind Shenyang Blue Silver and TPV Technology 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.