Correlation Between Wintime Energy and TCL Corp

Can any of the company-specific risk be diversified away by investing in both Wintime Energy and TCL Corp 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 Wintime Energy and TCL Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Wintime Energy and TCL Corp

0.71

Correlation Coefficient

Wintime Energy  TCL Corp

Poor diversification

The 3 months correlation between Wintime and TCL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Wintime Energy Co and TCL Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCL Corp and Wintime Energy 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 Wintime Energy Co are associated (or correlated) with TCL Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCL Corp has no effect on the direction of Wintime Energy i.e., Wintime Energy and TCL Corp go up and down completely randomly.

Pair Corralation between Wintime Energy and TCL Corp

Assuming the 90 days trading horizon Wintime Energy Co is expected to under-perform the TCL Corp. In addition to that, Wintime Energy is 1.1 times more volatile than TCL Corp. It trades about -0.2 of its total potential returns per unit of risk. TCL Corp is currently generating about -0.14 per unit of volatility. If you would invest  517.00  in TCL Corp on December 26, 2024 and sell it today you would lose (66.00) from holding TCL Corp or give up 12.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.28%
Values	Daily Returns

Wintime Energy Co  vs.  TCL Corp

Wintime Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wintime Energy Co 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TCL Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days TCL Corp 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wintime Energy and TCL Corp

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

The idea behind Wintime Energy Co and TCL Corp 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.