Correlation Between TSOGO SUN and LENNAR P

Can any of the company-specific risk be diversified away by investing in both TSOGO SUN and LENNAR P 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 TSOGO SUN and LENNAR P into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TSOGO SUN GAMING and LENNAR P B, you can compare the effects of market volatilities on TSOGO SUN and LENNAR P 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 TSOGO SUN with a short position of LENNAR P. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSOGO SUN and LENNAR P.

Diversification Opportunities for TSOGO SUN and LENNAR P

0.84

Correlation Coefficient

TSOGO SUN  LENNAR P

Very poor diversification

The 3 months correlation between TSOGO and LENNAR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding TSOGO SUN GAMING and LENNAR P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENNAR P B and TSOGO SUN 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 TSOGO SUN GAMING are associated (or correlated) with LENNAR P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENNAR P B has no effect on the direction of TSOGO SUN i.e., TSOGO SUN and LENNAR P go up and down completely randomly.

Pair Corralation between TSOGO SUN and LENNAR P

Assuming the 90 days horizon TSOGO SUN GAMING is expected to under-perform the LENNAR P. But the stock apears to be less risky and, when comparing its historical volatility, TSOGO SUN GAMING is 1.27 times less risky than LENNAR P. The stock trades about -0.14 of its potential returns per unit of risk. The LENNAR P B is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  12,452  in LENNAR P B on December 29, 2024 and sell it today you would lose (2,252) from holding LENNAR P B or give up 18.09% of portfolio value over 90 days.

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

TSOGO SUN GAMING  vs.  LENNAR P B

TSOGO SUN GAMING

Risk-Adjusted Performance

Very Weak

Over the last 90 days TSOGO SUN GAMING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

LENNAR P B

Risk-Adjusted Performance

Very Weak

Over the last 90 days LENNAR P B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TSOGO SUN and LENNAR P

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

The idea behind TSOGO SUN GAMING and LENNAR P B 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 Commodity Directory module to find actively traded commodities issued by global exchanges.