Correlation Between Shopify and TNEMAK

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

By analyzing existing cross correlation between Shopify and TNEMAK 3625 28 JUN 31, you can compare the effects of market volatilities on Shopify and TNEMAK 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 Shopify with a short position of TNEMAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shopify and TNEMAK.

Diversification Opportunities for Shopify and TNEMAK

-0.01

Correlation Coefficient

Shopify  TNEMAK

Good diversification

The 3 months correlation between Shopify and TNEMAK is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Shopify and TNEMAK 3625 28 JUN 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TNEMAK 3625 28 and Shopify 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 Shopify are associated (or correlated) with TNEMAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TNEMAK 3625 28 has no effect on the direction of Shopify i.e., Shopify and TNEMAK go up and down completely randomly.

Pair Corralation between Shopify and TNEMAK

Given the investment horizon of 90 days Shopify is expected to under-perform the TNEMAK. In addition to that, Shopify is 4.98 times more volatile than TNEMAK 3625 28 JUN 31. It trades about -0.01 of its total potential returns per unit of risk. TNEMAK 3625 28 JUN 31 is currently generating about 0.12 per unit of volatility. If you would invest  7,810  in TNEMAK 3625 28 JUN 31 on December 23, 2024 and sell it today you would earn a total of  153.00  from holding TNEMAK 3625 28 JUN 31 or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	39.34%
Values	Daily Returns

Shopify  vs.  TNEMAK 3625 28 JUN 31

Shopify

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shopify has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Shopify is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

TNEMAK 3625 28

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TNEMAK 3625 28 JUN 31 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TNEMAK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shopify and TNEMAK

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

The idea behind Shopify and TNEMAK 3625 28 JUN 31 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.