Correlation Between Silver Castle and Tedea Technological

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

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

Diversification Opportunities for Silver Castle and Tedea Technological

0.74

Correlation Coefficient

Silver Castle  Tedea Technological

Poor diversification

The 3 months correlation between Silver and Tedea is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Silver Castle Holdings and Tedea Technological Developmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tedea Technological and Silver Castle 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 Silver Castle Holdings are associated (or correlated) with Tedea Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tedea Technological has no effect on the direction of Silver Castle i.e., Silver Castle and Tedea Technological go up and down completely randomly.

Pair Corralation between Silver Castle and Tedea Technological

Assuming the 90 days trading horizon Silver Castle Holdings is expected to generate 3.8 times more return on investment than Tedea Technological. However, Silver Castle is 3.8 times more volatile than Tedea Technological Development. It trades about -0.02 of its potential returns per unit of risk. Tedea Technological Development is currently generating about -0.27 per unit of risk. If you would invest  45,520  in Silver Castle Holdings on December 30, 2024 and sell it today you would lose (5,920) from holding Silver Castle Holdings or give up 13.01% of portfolio value over 90 days.

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

Silver Castle Holdings  vs.  Tedea Technological Developmen

Silver Castle Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver Castle Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Tedea Technological

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tedea Technological Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Silver Castle and Tedea Technological

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

The idea behind Silver Castle Holdings and Tedea Technological Development 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.