Correlation Between THORNEY TECHS and Continental

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

By analyzing existing cross correlation between THORNEY TECHS LTD and Camden Property Trust, you can compare the effects of market volatilities on THORNEY TECHS and Continental 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 THORNEY TECHS with a short position of Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and Continental.

Diversification Opportunities for THORNEY TECHS and Continental

0.1

Correlation Coefficient

THORNEY TECHS  Continental

Average diversification

The 3 months correlation between THORNEY and Continental is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust and THORNEY TECHS 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 THORNEY TECHS LTD are associated (or correlated) with Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of THORNEY TECHS i.e., THORNEY TECHS and Continental go up and down completely randomly.

Pair Corralation between THORNEY TECHS and Continental

Assuming the 90 days horizon THORNEY TECHS LTD is expected to under-perform the Continental. In addition to that, THORNEY TECHS is 2.79 times more volatile than Camden Property Trust. It trades about -0.03 of its total potential returns per unit of risk. Camden Property Trust is currently generating about -0.03 per unit of volatility. If you would invest  10,999  in Camden Property Trust on October 24, 2024 and sell it today you would lose (299.00) from holding Camden Property Trust or give up 2.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

THORNEY TECHS LTD  vs.  Camden Property Trust

THORNEY TECHS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days THORNEY TECHS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Camden Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camden Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Continental is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with THORNEY TECHS and Continental

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

The idea behind THORNEY TECHS LTD and Camden Property Trust 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..