Correlation Between TINC Comm and KBC Ancora

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

By analyzing existing cross correlation between TINC Comm VA and KBC Ancora, you can compare the effects of market volatilities on TINC Comm and KBC Ancora 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 TINC Comm with a short position of KBC Ancora. Check out your portfolio center. Please also check ongoing floating volatility patterns of TINC Comm and KBC Ancora.

Diversification Opportunities for TINC Comm and KBC Ancora

-0.6

Correlation Coefficient

TINC Comm  KBC Ancora

Excellent diversification

The 3 months correlation between TINC and KBC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding TINC Comm VA and KBC Ancora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora and TINC Comm 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 TINC Comm VA are associated (or correlated) with KBC Ancora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Ancora has no effect on the direction of TINC Comm i.e., TINC Comm and KBC Ancora go up and down completely randomly.

Pair Corralation between TINC Comm and KBC Ancora

Assuming the 90 days trading horizon TINC Comm VA is expected to under-perform the KBC Ancora. But the stock apears to be less risky and, when comparing its historical volatility, TINC Comm VA is 1.68 times less risky than KBC Ancora. The stock trades about -0.1 of its potential returns per unit of risk. The KBC Ancora is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  4,860  in KBC Ancora on October 9, 2024 and sell it today you would earn a total of  330.00  from holding KBC Ancora or generate 6.79% return on investment over 90 days.

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

TINC Comm VA  vs.  KBC Ancora

TINC Comm VA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TINC Comm VA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

KBC Ancora

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, KBC Ancora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TINC Comm and KBC Ancora

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

The idea behind TINC Comm VA and KBC Ancora 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.