Correlation Between TKS Technologies and Dental Public

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

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

Diversification Opportunities for TKS Technologies and Dental Public

0.67

Correlation Coefficient

TKS Technologies  Dental Public

Poor diversification

The 3 months correlation between TKS and Dental is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies Public and Dental Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dental Public and TKS Technologies 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 TKS Technologies Public are associated (or correlated) with Dental Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dental Public has no effect on the direction of TKS Technologies i.e., TKS Technologies and Dental Public go up and down completely randomly.

Pair Corralation between TKS Technologies and Dental Public

Assuming the 90 days trading horizon TKS Technologies is expected to generate 1.03 times less return on investment than Dental Public. But when comparing it to its historical volatility, TKS Technologies Public is 1.0 times less risky than Dental Public. It trades about 0.04 of its potential returns per unit of risk. Dental Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  460.00  in Dental Public on September 12, 2024 and sell it today you would lose (146.00) from holding Dental Public or give up 31.74% of portfolio value over 90 days.

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

TKS Technologies Public  vs.  Dental Public

TKS Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKS Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Dental Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dental Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with TKS Technologies and Dental Public

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

The idea behind TKS Technologies Public and Dental Public 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.