Correlation Between TBC Bank and Auction Technology

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Can any of the company-specific risk be diversified away by investing in both TBC Bank and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on TBC Bank and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Auction Technology.

Diversification Opportunities for TBC Bank and Auction Technology

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between TBC and Auction is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of TBC Bank i.e., TBC Bank and Auction Technology go up and down completely randomly.

Pair Corralation between TBC Bank and Auction Technology

Assuming the 90 days trading horizon TBC Bank Group is expected to generate 0.91 times more return on investment than Auction Technology. However, TBC Bank Group is 1.09 times less risky than Auction Technology. It trades about -0.06 of its potential returns per unit of risk. Auction Technology Group is currently generating about -0.17 per unit of risk. If you would invest  310,000  in TBC Bank Group on October 11, 2024 and sell it today you would lose (5,500) from holding TBC Bank Group or give up 1.77% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

TBC Bank Group  vs.  Auction Technology Group

 Performance 
       Timeline  
TBC Bank Group 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, TBC Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.
Auction Technology 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Auction Technology Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Auction Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

TBC Bank and Auction Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TBC Bank and Auction Technology

The main advantage of trading using opposite TBC Bank and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBC Bank position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.
The idea behind TBC Bank Group and Auction Technology Group 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.
Check out your portfolio center.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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