Correlation Between Banyan Tree and Table Trac

Can any of the company-specific risk be diversified away by investing in both Banyan Tree and Table Trac 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 Banyan Tree and Table Trac into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banyan Tree Holdings and Table Trac, you can compare the effects of market volatilities on Banyan Tree and Table Trac 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 Banyan Tree with a short position of Table Trac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banyan Tree and Table Trac.

Diversification Opportunities for Banyan Tree and Table Trac

0.0

Correlation Coefficient

Banyan Tree  Table Trac

Pay attention - limited upside

The 3 months correlation between Banyan and Table is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banyan Tree Holdings and Table Trac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Table Trac and Banyan Tree 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 Banyan Tree Holdings are associated (or correlated) with Table Trac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Table Trac has no effect on the direction of Banyan Tree i.e., Banyan Tree and Table Trac go up and down completely randomly.

Pair Corralation between Banyan Tree and Table Trac

If you would invest  387.00  in Table Trac on December 3, 2024 and sell it today you would earn a total of  12.00  from holding Table Trac or generate 3.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Banyan Tree Holdings  vs.  Table Trac

Banyan Tree Holdings

Risk-Adjusted Performance

Very Weak

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

Table Trac

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Table Trac are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Table Trac may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Banyan Tree and Table Trac

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

The idea behind Banyan Tree Holdings and Table Trac 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.