Correlation Between Tinybeans Group and Prosus NV

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

By analyzing existing cross correlation between Tinybeans Group Limited and Prosus NV ADR, you can compare the effects of market volatilities on Tinybeans Group and Prosus NV 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 Tinybeans Group with a short position of Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tinybeans Group and Prosus NV.

Diversification Opportunities for Tinybeans Group and Prosus NV

0.28

Correlation Coefficient

Tinybeans Group  Prosus NV

Modest diversification

The 3 months correlation between Tinybeans and Prosus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tinybeans Group Limited and Prosus NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV ADR and Tinybeans Group 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 Tinybeans Group Limited are associated (or correlated) with Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV ADR has no effect on the direction of Tinybeans Group i.e., Tinybeans Group and Prosus NV go up and down completely randomly.

Pair Corralation between Tinybeans Group and Prosus NV

Assuming the 90 days horizon Tinybeans Group Limited is expected to under-perform the Prosus NV. In addition to that, Tinybeans Group is 3.57 times more volatile than Prosus NV ADR. It trades about -0.32 of its total potential returns per unit of risk. Prosus NV ADR is currently generating about -0.36 per unit of volatility. If you would invest  830.00  in Prosus NV ADR on October 21, 2024 and sell it today you would lose (119.00) from holding Prosus NV ADR or give up 14.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Tinybeans Group Limited  vs.  Prosus NV ADR

Tinybeans Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tinybeans Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Prosus NV ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosus NV ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tinybeans Group and Prosus NV

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

The idea behind Tinybeans Group Limited and Prosus NV ADR 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.