Correlation Between TBC Bank and Symphony Environmental

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

Diversification Opportunities for TBC Bank and Symphony Environmental

-0.45

Correlation Coefficient

TBC Bank  Symphony Environmental

Very good diversification

The 3 months correlation between TBC and Symphony is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of TBC Bank i.e., TBC Bank and Symphony Environmental go up and down completely randomly.

Pair Corralation between TBC Bank and Symphony Environmental

Assuming the 90 days trading horizon TBC Bank Group is expected to generate 1.01 times more return on investment than Symphony Environmental. However, TBC Bank is 1.01 times more volatile than Symphony Environmental Technologies. It trades about 0.05 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about -0.03 per unit of risk. If you would invest  291,500  in TBC Bank Group on October 22, 2024 and sell it today you would earn a total of  15,500  from holding TBC Bank Group or generate 5.32% return on investment over 90 days.

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

TBC Bank Group  vs.  Symphony Environmental Technol

TBC Bank Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TBC Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Symphony Environmental is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TBC Bank and Symphony Environmental

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

The idea behind TBC Bank Group and Symphony Environmental Technologies 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.