Correlation Between TBC Bank and Capital Metals

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

Diversification Opportunities for TBC Bank and Capital Metals

-0.42

Correlation Coefficient

TBC Bank  Capital Metals

Very good diversification

The 3 months correlation between TBC and Capital is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals PLC 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 Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of TBC Bank i.e., TBC Bank and Capital Metals go up and down completely randomly.

Pair Corralation between TBC Bank and Capital Metals

Assuming the 90 days trading horizon TBC Bank Group is expected to generate 0.83 times more return on investment than Capital Metals. However, TBC Bank Group is 1.21 times less risky than Capital Metals. It trades about 0.0 of its potential returns per unit of risk. Capital Metals PLC is currently generating about -0.33 per unit of risk. If you would invest  306,000  in TBC Bank Group on October 10, 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	Very Weak
Accuracy	95.0%
Values	Daily Returns

TBC Bank Group  vs.  Capital Metals PLC

TBC Bank Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 9 (%) 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.

Capital Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capital Metals 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 Capital Metals

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

The idea behind TBC Bank Group and Capital Metals PLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.