Correlation Between Takuni Group and TAC Consumer

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

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

Diversification Opportunities for Takuni Group and TAC Consumer

0.05

Correlation Coefficient

Takuni Group  TAC Consumer

Significant diversification

The 3 months correlation between Takuni and TAC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Takuni Group Public and TAC Consumer Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAC Consumer Public and Takuni Group 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 Takuni Group Public are associated (or correlated) with TAC Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAC Consumer Public has no effect on the direction of Takuni Group i.e., Takuni Group and TAC Consumer go up and down completely randomly.

Pair Corralation between Takuni Group and TAC Consumer

Assuming the 90 days trading horizon Takuni Group Public is expected to under-perform the TAC Consumer. In addition to that, Takuni Group is 5.01 times more volatile than TAC Consumer Public. It trades about -0.04 of its total potential returns per unit of risk. TAC Consumer Public is currently generating about -0.02 per unit of volatility. If you would invest  464.00  in TAC Consumer Public on December 29, 2024 and sell it today you would lose (12.00) from holding TAC Consumer Public or give up 2.59% of portfolio value over 90 days.

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

Takuni Group Public  vs.  TAC Consumer Public

Takuni Group Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Takuni Group Public 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 forward-looking signals 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.

TAC Consumer Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days TAC Consumer Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, TAC Consumer is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Takuni Group and TAC Consumer

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

The idea behind Takuni Group Public and TAC Consumer Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.