Correlation Between Research Solutions and TSR

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

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

Diversification Opportunities for Research Solutions and TSR

0.0

Correlation Coefficient

Research Solutions  TSR

Pay attention - limited upside

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

Pair Corralation between Research Solutions and TSR

Given the investment horizon of 90 days Research Solutions is expected to generate 1.11 times less return on investment than TSR. But when comparing it to its historical volatility, Research Solutions is 1.56 times less risky than TSR. It trades about 0.06 of its potential returns per unit of risk. TSR Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  943.00  in TSR Inc on October 25, 2024 and sell it today you would earn a total of  395.00  from holding TSR Inc or generate 41.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	70.85%
Values	Daily Returns

Research Solutions  vs.  TSR Inc

Research Solutions

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Research Solutions are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Research Solutions unveiled solid returns over the last few months and may actually be approaching a breakup point.

TSR Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSR Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, TSR is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Research Solutions and TSR

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

The idea behind Research Solutions and TSR Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.