Correlation Between TTG Fintech and Stelar Metals

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

By analyzing existing cross correlation between TTG Fintech and Stelar Metals, you can compare the effects of market volatilities on TTG Fintech and Stelar Metals 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 Stelar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTG Fintech and Stelar Metals.

Diversification Opportunities for TTG Fintech and Stelar Metals

0.27

Correlation Coefficient

TTG Fintech  Stelar Metals

Modest diversification

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

Pair Corralation between TTG Fintech and Stelar Metals

Assuming the 90 days trading horizon TTG Fintech is expected to generate 4.05 times more return on investment than Stelar Metals. However, TTG Fintech is 4.05 times more volatile than Stelar Metals. It trades about -0.01 of its potential returns per unit of risk. Stelar Metals is currently generating about -0.09 per unit of risk. If you would invest  0.70  in TTG Fintech on December 20, 2024 and sell it today you would lose (0.20) from holding TTG Fintech or give up 28.57% of portfolio value over 90 days.

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

TTG Fintech  vs.  Stelar Metals

TTG Fintech

Risk-Adjusted Performance

Very Weak

Over the last 90 days TTG Fintech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Stelar Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stelar Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with TTG Fintech and Stelar Metals

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

The idea behind TTG Fintech and Stelar Metals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.