Correlation Between Tech Central and Roku

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

By analyzing existing cross correlation between Tech Central and Roku Inc, you can compare the effects of market volatilities on Tech Central and Roku 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 Tech Central with a short position of Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tech Central and Roku.

Diversification Opportunities for Tech Central and Roku

0.0

Correlation Coefficient

Tech Central  Roku

Pay attention - limited upside

The 3 months correlation between Tech and Roku is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tech Central and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and Tech Central 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 Tech Central are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Tech Central i.e., Tech Central and Roku go up and down completely randomly.

Pair Corralation between Tech Central and Roku

If you would invest  7,948  in Roku Inc on December 26, 2024 and sell it today you would lose (161.00) from holding Roku Inc or give up 2.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Tech Central  vs.  Roku Inc

Tech Central

Risk-Adjusted Performance

Very Weak

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

Roku Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Roku Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Roku 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 Tech Central and Roku

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

The idea behind Tech Central and Roku Inc 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.