Correlation Between Tinley Beverage and Iconic Brands

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

By analyzing existing cross correlation between The Tinley Beverage and Iconic Brands, you can compare the effects of market volatilities on Tinley Beverage and Iconic Brands 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 Tinley Beverage with a short position of Iconic Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tinley Beverage and Iconic Brands.

Diversification Opportunities for Tinley Beverage and Iconic Brands

0.0

Correlation Coefficient

Tinley Beverage  Iconic Brands

Pay attention - limited upside

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

Pair Corralation between Tinley Beverage and Iconic Brands

If you would invest  2.30  in The Tinley Beverage on December 29, 2024 and sell it today you would earn a total of  0.05  from holding The Tinley Beverage or generate 2.17% return on investment over 90 days.

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

The Tinley Beverage  vs.  Iconic Brands

Tinley Beverage

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Tinley Beverage are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Tinley Beverage reported solid returns over the last few months and may actually be approaching a breakup point.

Iconic Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iconic Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iconic Brands is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tinley Beverage and Iconic Brands

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

The idea behind The Tinley Beverage and Iconic Brands 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.