Correlation Between Television Broadcasts and BROADWIND ENRGY

Can any of the company-specific risk be diversified away by investing in both Television Broadcasts and BROADWIND ENRGY 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 Television Broadcasts and BROADWIND ENRGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Television Broadcasts Limited and BROADWIND ENRGY, you can compare the effects of market volatilities on Television Broadcasts and BROADWIND ENRGY 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 Television Broadcasts with a short position of BROADWIND ENRGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Television Broadcasts and BROADWIND ENRGY.

Diversification Opportunities for Television Broadcasts and BROADWIND ENRGY

0.18

Correlation Coefficient

Television Broadcasts  BROADWIND ENRGY

Average diversification

The 3 months correlation between Television and BROADWIND is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Television Broadcasts Limited and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY and Television Broadcasts 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 Television Broadcasts Limited are associated (or correlated) with BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of Television Broadcasts i.e., Television Broadcasts and BROADWIND ENRGY go up and down completely randomly.

Pair Corralation between Television Broadcasts and BROADWIND ENRGY

Assuming the 90 days trading horizon Television Broadcasts Limited is expected to generate 1.44 times more return on investment than BROADWIND ENRGY. However, Television Broadcasts is 1.44 times more volatile than BROADWIND ENRGY. It trades about 0.02 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about -0.02 per unit of risk. If you would invest  45.00  in Television Broadcasts Limited on October 10, 2024 and sell it today you would lose (10.00) from holding Television Broadcasts Limited or give up 22.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Television Broadcasts Limited  vs.  BROADWIND ENRGY

Television Broadcasts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Television Broadcasts Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BROADWIND ENRGY

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BROADWIND ENRGY are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, BROADWIND ENRGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Television Broadcasts and BROADWIND ENRGY

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

The idea behind Television Broadcasts Limited and BROADWIND ENRGY 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.