Correlation Between TBC Bank and Vastned Retail

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

By analyzing existing cross correlation between TBC Bank Group and Vastned Retail NV, you can compare the effects of market volatilities on TBC Bank and Vastned Retail 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 TBC Bank with a short position of Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Vastned Retail.

Diversification Opportunities for TBC Bank and Vastned Retail

-0.23

Correlation Coefficient

TBC Bank  Vastned Retail

Very good diversification

The 3 months correlation between TBC and Vastned is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV and TBC Bank 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 TBC Bank Group are associated (or correlated) with Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of TBC Bank i.e., TBC Bank and Vastned Retail go up and down completely randomly.

Pair Corralation between TBC Bank and Vastned Retail

Assuming the 90 days trading horizon TBC Bank Group is expected to generate 0.9 times more return on investment than Vastned Retail. However, TBC Bank Group is 1.11 times less risky than Vastned Retail. It trades about 0.0 of its potential returns per unit of risk. Vastned Retail NV is currently generating about -0.18 per unit of risk. If you would invest  306,000  in TBC Bank Group on October 9, 2024 and sell it today you would lose (500.00) from holding TBC Bank Group or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.21%
Values	Daily Returns

TBC Bank Group  vs.  Vastned Retail NV

TBC Bank Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TBC Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vastned Retail is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TBC Bank and Vastned Retail

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

The idea behind TBC Bank Group and Vastned Retail NV 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.