Correlation Between Tat Techno and B3 SA

Can any of the company-specific risk be diversified away by investing in both Tat Techno and B3 SA 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 Tat Techno and B3 SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tat Techno and B3 SA , you can compare the effects of market volatilities on Tat Techno and B3 SA 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 Tat Techno with a short position of B3 SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and B3 SA.

Diversification Opportunities for Tat Techno and B3 SA

-0.83

Correlation Coefficient

Tat Techno  B3 SA

Pay attention - limited upside

The 3 months correlation between Tat and BOLSY is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and B3 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B3 SA and Tat Techno 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 Tat Techno are associated (or correlated) with B3 SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B3 SA has no effect on the direction of Tat Techno i.e., Tat Techno and B3 SA go up and down completely randomly.

Pair Corralation between Tat Techno and B3 SA

Given the investment horizon of 90 days Tat Techno is expected to generate 0.82 times more return on investment than B3 SA. However, Tat Techno is 1.22 times less risky than B3 SA. It trades about 0.26 of its potential returns per unit of risk. B3 SA is currently generating about -0.04 per unit of risk. If you would invest  2,201  in Tat Techno on September 27, 2024 and sell it today you would earn a total of  391.00  from holding Tat Techno or generate 17.76% return on investment over 90 days.

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

Tat Techno  vs.  B3 SA

Tat Techno

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tat Techno are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Tat Techno unveiled solid returns over the last few months and may actually be approaching a breakup point.

B3 SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B3 SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Pair Trading with Tat Techno and B3 SA

The main advantage of trading using opposite Tat Techno and B3 SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno position performs unexpectedly, B3 SA 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 B3 SA will offset losses from the drop in B3 SA's long position.

The idea behind Tat Techno and B3 SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.