Correlation Between TTG Fintech and Ava Risk

Can any of the company-specific risk be diversified away by investing in both TTG Fintech and Ava Risk 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 TTG Fintech and Ava Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TTG Fintech and Ava Risk Group, you can compare the effects of market volatilities on TTG Fintech and Ava Risk 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 TTG Fintech with a short position of Ava Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTG Fintech and Ava Risk.

Diversification Opportunities for TTG Fintech and Ava Risk

0.27

Correlation Coefficient

TTG Fintech  Ava Risk

Modest diversification

The 3 months correlation between TTG and Ava is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding TTG Fintech and Ava Risk Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ava Risk Group and TTG Fintech 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 TTG Fintech are associated (or correlated) with Ava Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ava Risk Group has no effect on the direction of TTG Fintech i.e., TTG Fintech and Ava Risk go up and down completely randomly.

Pair Corralation between TTG Fintech and Ava Risk

Assuming the 90 days trading horizon TTG Fintech is expected to generate 1.84 times more return on investment than Ava Risk. However, TTG Fintech is 1.84 times more volatile than Ava Risk Group. It trades about 0.08 of its potential returns per unit of risk. Ava Risk Group is currently generating about 0.02 per unit of risk. If you would invest  0.60  in TTG Fintech on September 23, 2024 and sell it today you would earn a total of  0.10  from holding TTG Fintech or generate 16.67% return on investment over 90 days.

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

TTG Fintech  vs.  Ava Risk Group

TTG Fintech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TTG Fintech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, TTG Fintech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ava Risk Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ava Risk Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ava Risk unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TTG Fintech and Ava Risk

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

The idea behind TTG Fintech and Ava Risk Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.