Correlation Between TTCL Public and Fine Metal
Can any of the company-specific risk be diversified away by investing in both TTCL Public and Fine Metal 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 TTCL Public and Fine Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TTCL Public and Fine Metal Technologies, you can compare the effects of market volatilities on TTCL Public and Fine Metal 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 TTCL Public with a short position of Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTCL Public and Fine Metal.
Diversification Opportunities for TTCL Public and Fine Metal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TTCL and Fine is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TTCL Public and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies and TTCL Public 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 TTCL Public are associated (or correlated) with Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of TTCL Public i.e., TTCL Public and Fine Metal go up and down completely randomly.
Pair Corralation between TTCL Public and Fine Metal
Assuming the 90 days trading horizon TTCL Public is expected to under-perform the Fine Metal. In addition to that, TTCL Public is 1.03 times more volatile than Fine Metal Technologies. It trades about -0.3 of its total potential returns per unit of risk. Fine Metal Technologies is currently generating about -0.09 per unit of volatility. If you would invest 3,165 in Fine Metal Technologies on December 28, 2024 and sell it today you would lose (465.00) from holding Fine Metal Technologies or give up 14.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
TTCL Public vs. Fine Metal Technologies
Performance |
Timeline |
TTCL Public |
Fine Metal Technologies |
TTCL Public and Fine Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TTCL Public and Fine Metal
The main advantage of trading using opposite TTCL Public and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTCL Public position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal's long position.TTCL Public vs. STPI Public | TTCL Public vs. WHA Public | TTCL Public vs. Italian Thai Development Public | TTCL Public vs. Jasmine International Public |
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Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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