Correlation Between Humble Fume and TAAT Global

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

By analyzing existing cross correlation between Humble Fume and TAAT Global Alternatives, you can compare the effects of market volatilities on Humble Fume and TAAT 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 Humble Fume with a short position of TAAT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Fume and TAAT Global.

Diversification Opportunities for Humble Fume and TAAT Global

0.0

Correlation Coefficient

Humble Fume  TAAT Global

Pay attention - limited upside

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

Pair Corralation between Humble Fume and TAAT Global

If you would invest  9.68  in TAAT Global Alternatives on December 26, 2024 and sell it today you would earn a total of  6.32  from holding TAAT Global Alternatives or generate 65.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Humble Fume  vs.  TAAT Global Alternatives

Humble Fume

Risk-Adjusted Performance

Very Weak

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

TAAT Global Alternatives

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TAAT Global Alternatives are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, TAAT Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humble Fume and TAAT Global

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

The idea behind Humble Fume and TAAT Global Alternatives 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.