Correlation Between TINC Comm and OSB GROUP

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

By analyzing existing cross correlation between TINC Comm VA and OSB GROUP PLC, you can compare the effects of market volatilities on TINC Comm and OSB GROUP 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 TINC Comm with a short position of OSB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of TINC Comm and OSB GROUP.

Diversification Opportunities for TINC Comm and OSB GROUP

-0.3

Correlation Coefficient

TINC Comm  OSB GROUP

Very good diversification

The 3 months correlation between TINC and OSB is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding TINC Comm VA and OSB GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSB GROUP PLC and TINC Comm 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 TINC Comm VA are associated (or correlated) with OSB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSB GROUP PLC has no effect on the direction of TINC Comm i.e., TINC Comm and OSB GROUP go up and down completely randomly.

Pair Corralation between TINC Comm and OSB GROUP

Assuming the 90 days horizon TINC Comm is expected to generate 2.81 times less return on investment than OSB GROUP. But when comparing it to its historical volatility, TINC Comm VA is 7.06 times less risky than OSB GROUP. It trades about 0.03 of its potential returns per unit of risk. OSB GROUP PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  488.00  in OSB GROUP PLC on October 5, 2024 and sell it today you would earn a total of  0.00  from holding OSB GROUP PLC or generate 0.0% return on investment over 90 days.

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

TINC Comm VA  vs.  OSB GROUP PLC

TINC Comm VA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TINC Comm VA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

OSB GROUP PLC

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days OSB GROUP PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, OSB GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TINC Comm and OSB GROUP

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

The idea behind TINC Comm VA and OSB GROUP PLC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.