Correlation Between TKB Critical and Symbotic

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

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

Diversification Opportunities for TKB Critical and Symbotic

-0.67

Correlation Coefficient

TKB Critical  Symbotic

Excellent diversification

The 3 months correlation between TKB and Symbotic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding TKB Critical Technologies and Symbotic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symbotic and TKB Critical 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 TKB Critical Technologies are associated (or correlated) with Symbotic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symbotic has no effect on the direction of TKB Critical i.e., TKB Critical and Symbotic go up and down completely randomly.

Pair Corralation between TKB Critical and Symbotic

If you would invest  1,800  in Symbotic on September 5, 2024 and sell it today you would earn a total of  750.00  from holding Symbotic or generate 41.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	3.13%
Values	Daily Returns

TKB Critical Technologies  vs.  Symbotic

TKB Critical Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKB Critical Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TKB Critical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Symbotic

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Symbotic are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Symbotic displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TKB Critical and Symbotic

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

The idea behind TKB Critical Technologies and Symbotic 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.