Correlation Between Posera and TD Holdings

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

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

Diversification Opportunities for Posera and TD Holdings

0.0

Correlation Coefficient

Posera  TD Holdings

Pay attention - limited upside

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

Pair Corralation between Posera and TD Holdings

If you would invest  2.88  in Posera on December 28, 2024 and sell it today you would earn a total of  0.56  from holding Posera or generate 19.44% return on investment over 90 days.

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

Posera  vs.  TD Holdings

Posera

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Posera are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Posera reported solid returns over the last few months and may actually be approaching a breakup point.

TD Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Posera and TD Holdings

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

The idea behind Posera and TD Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.