Correlation Between Turning Point and 191216DQ0

Can any of the company-specific risk be diversified away by investing in both Turning Point and 191216DQ0 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 Turning Point and 191216DQ0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turning Point Brands and COCA COLA CO, you can compare the effects of market volatilities on Turning Point and 191216DQ0 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 Turning Point with a short position of 191216DQ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and 191216DQ0.

Diversification Opportunities for Turning Point and 191216DQ0

-0.08

Correlation Coefficient

Turning Point  191216DQ0

Good diversification

The 3 months correlation between Turning and 191216DQ0 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO and Turning Point 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 Turning Point Brands are associated (or correlated) with 191216DQ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Turning Point i.e., Turning Point and 191216DQ0 go up and down completely randomly.

Pair Corralation between Turning Point and 191216DQ0

Considering the 90-day investment horizon Turning Point Brands is expected to under-perform the 191216DQ0. In addition to that, Turning Point is 1.94 times more volatile than COCA COLA CO. It trades about -0.09 of its total potential returns per unit of risk. COCA COLA CO is currently generating about 0.03 per unit of volatility. If you would invest  7,317  in COCA COLA CO on October 25, 2024 and sell it today you would earn a total of  30.00  from holding COCA COLA CO or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.47%
Values	Daily Returns

Turning Point Brands  vs.  COCA COLA CO

Turning Point Brands

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Turning Point sustained solid returns over the last few months and may actually be approaching a breakup point.

COCA A CO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216DQ0 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Turning Point and 191216DQ0

The main advantage of trading using opposite Turning Point and 191216DQ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, 191216DQ0 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 191216DQ0 will offset losses from the drop in 191216DQ0's long position.

The idea behind Turning Point Brands and COCA COLA CO 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.