Correlation Between TTCL Public and Thaire Life

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

By analyzing existing cross correlation between TTCL Public and Thaire Life Assurance, you can compare the effects of market volatilities on TTCL Public and Thaire Life 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 Thaire Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTCL Public and Thaire Life.

Diversification Opportunities for TTCL Public and Thaire Life

0.86

Correlation Coefficient

TTCL Public  Thaire Life

Very poor diversification

The 3 months correlation between TTCL and Thaire is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding TTCL Public and Thaire Life Assurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaire Life Assurance 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 Thaire Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaire Life Assurance has no effect on the direction of TTCL Public i.e., TTCL Public and Thaire Life go up and down completely randomly.

Pair Corralation between TTCL Public and Thaire Life

Assuming the 90 days trading horizon TTCL Public is expected to generate 1.03 times less return on investment than Thaire Life. In addition to that, TTCL Public is 1.0 times more volatile than Thaire Life Assurance. It trades about 0.11 of its total potential returns per unit of risk. Thaire Life Assurance is currently generating about 0.11 per unit of volatility. If you would invest  170.00  in Thaire Life Assurance on September 2, 2024 and sell it today you would lose (3.00) from holding Thaire Life Assurance or give up 1.76% 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.  Thaire Life Assurance

TTCL Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TTCL Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, TTCL Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Thaire Life Assurance

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thaire Life Assurance are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Thaire Life sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TTCL Public and Thaire Life

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

The idea behind TTCL Public and Thaire Life Assurance 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.