Correlation Between Stryve Foods and TDH Holdings

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

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

Diversification Opportunities for Stryve Foods and TDH Holdings

-0.34

Correlation Coefficient

Stryve Foods  TDH Holdings

Very good diversification

The 3 months correlation between Stryve and TDH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Stryve Foods and TDH Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDH Holdings and Stryve Foods 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 Stryve Foods are associated (or correlated) with TDH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDH Holdings has no effect on the direction of Stryve Foods i.e., Stryve Foods and TDH Holdings go up and down completely randomly.

Pair Corralation between Stryve Foods and TDH Holdings

Given the investment horizon of 90 days Stryve Foods is expected to under-perform the TDH Holdings. In addition to that, Stryve Foods is 1.99 times more volatile than TDH Holdings. It trades about -0.07 of its total potential returns per unit of risk. TDH Holdings is currently generating about 0.02 per unit of volatility. If you would invest  122.00  in TDH Holdings on September 2, 2024 and sell it today you would earn a total of  1.00  from holding TDH Holdings or generate 0.82% return on investment over 90 days.

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

Stryve Foods  vs.  TDH Holdings

Stryve Foods

Risk-Adjusted Performance

0 of 100

Very Weak

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

TDH Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TDH Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, TDH Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stryve Foods and TDH Holdings

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

The idea behind Stryve Foods and TDH 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.