Correlation Between TBC Bank and Auction Technology
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TBC Bank Group vs. Auction Technology Group
Performance |
Timeline |
TBC Bank Group |
Auction Technology |
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.TBC Bank vs. Auction Technology Group | TBC Bank vs. Coor Service Management | TBC Bank vs. Alfa Financial Software | TBC Bank vs. Monster Beverage Corp |
Auction Technology vs. Berkshire Hathaway | Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Chocoladefabriken Lindt Spruengli |
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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