Correlation Between Chia and TNP Old

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

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

Diversification Opportunities for Chia and TNP Old

0.89

Correlation Coefficient

Chia  TNP Old

Very poor diversification

The 3 months correlation between Chia and TNP is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chia and TNP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TNP Old and Chia 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 Chia are associated (or correlated) with TNP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TNP Old has no effect on the direction of Chia i.e., Chia and TNP Old go up and down completely randomly.

Pair Corralation between Chia and TNP Old

Assuming the 90 days trading horizon Chia is expected to under-perform the TNP Old. In addition to that, Chia is 2.16 times more volatile than TNP Old. It trades about -0.02 of its total potential returns per unit of risk. TNP Old is currently generating about 0.07 per unit of volatility. If you would invest  1,730  in TNP Old on October 11, 2024 and sell it today you would earn a total of  1,198  from holding TNP Old or generate 69.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	81.82%
Values	Daily Returns

Chia  vs.  TNP Old

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

TNP Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TNP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, TNP Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Chia and TNP Old

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

The idea behind Chia and TNP Old 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.