Correlation Between Asphere Innovations and TKS Technologies

Can any of the company-specific risk be diversified away by investing in both Asphere Innovations and TKS Technologies 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 Asphere Innovations and TKS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asphere Innovations Public and TKS Technologies Public, you can compare the effects of market volatilities on Asphere Innovations and TKS Technologies 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 Asphere Innovations with a short position of TKS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asphere Innovations and TKS Technologies.

Diversification Opportunities for Asphere Innovations and TKS Technologies

0.55

Correlation Coefficient

Asphere Innovations  TKS Technologies

Very weak diversification

The 3 months correlation between Asphere and TKS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Asphere Innovations Public and TKS Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKS Technologies Public and Asphere Innovations 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 Asphere Innovations Public are associated (or correlated) with TKS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKS Technologies Public has no effect on the direction of Asphere Innovations i.e., Asphere Innovations and TKS Technologies go up and down completely randomly.

Pair Corralation between Asphere Innovations and TKS Technologies

Assuming the 90 days horizon Asphere Innovations Public is expected to generate 2.9 times more return on investment than TKS Technologies. However, Asphere Innovations is 2.9 times more volatile than TKS Technologies Public. It trades about 0.0 of its potential returns per unit of risk. TKS Technologies Public is currently generating about -0.31 per unit of risk. If you would invest  386.00  in Asphere Innovations Public on September 12, 2024 and sell it today you would lose (4.00) from holding Asphere Innovations Public or give up 1.04% of portfolio value over 90 days.

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

Asphere Innovations Public  vs.  TKS Technologies Public

Asphere Innovations

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asphere Innovations Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Asphere Innovations is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

TKS Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKS Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Asphere Innovations and TKS Technologies

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

The idea behind Asphere Innovations Public and TKS Technologies Public 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.