Correlation Between TSJA and SPDR SP

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

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

Diversification Opportunities for TSJA and SPDR SP

0.0

Correlation Coefficient

TSJA  SPDR SP

Pay attention - limited upside

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

Pair Corralation between TSJA and SPDR SP

If you would invest (100.00) in TSJA on December 26, 2024 and sell it today you would earn a total of  100.00  from holding TSJA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TSJA  vs.  SPDR SP Kensho

TSJA

Risk-Adjusted Performance

Very Weak

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

SPDR SP Kensho

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR SP Kensho has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, SPDR SP is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TSJA and SPDR SP

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

The idea behind TSJA and SPDR SP Kensho 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.