Correlation Between CEO Group and TDG Global

Can any of the company-specific risk be diversified away by investing in both CEO Group and TDG Global 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 CEO Group and TDG Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CEO Group JSC and TDG Global Investment, you can compare the effects of market volatilities on CEO Group and TDG Global 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 CEO Group with a short position of TDG Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEO Group and TDG Global.

Diversification Opportunities for CEO Group and TDG Global

0.7

Correlation Coefficient

CEO Group  TDG Global

Poor diversification

The 3 months correlation between CEO and TDG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and TDG Global Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDG Global Investment and CEO Group 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 CEO Group JSC are associated (or correlated) with TDG Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDG Global Investment has no effect on the direction of CEO Group i.e., CEO Group and TDG Global go up and down completely randomly.

Pair Corralation between CEO Group and TDG Global

Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the TDG Global. In addition to that, CEO Group is 1.2 times more volatile than TDG Global Investment. It trades about 0.0 of its total potential returns per unit of risk. TDG Global Investment is currently generating about 0.03 per unit of volatility. If you would invest  284,091  in TDG Global Investment on October 27, 2024 and sell it today you would earn a total of  67,909  from holding TDG Global Investment or generate 23.9% return on investment over 90 days.

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

CEO Group JSC  vs.  TDG Global Investment

CEO Group JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEO Group JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

TDG Global Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TDG Global Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CEO Group and TDG Global

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

The idea behind CEO Group JSC and TDG Global Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .