Correlation Between SBI Holdings and TAMURA CORP

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

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

Diversification Opportunities for SBI Holdings and TAMURA CORP

0.58

Correlation Coefficient

SBI Holdings  TAMURA CORP

Very weak diversification

The 3 months correlation between SBI and TAMURA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SBI Holdings and TAMURA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAMURA CORP and SBI Holdings 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 SBI Holdings are associated (or correlated) with TAMURA CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAMURA CORP has no effect on the direction of SBI Holdings i.e., SBI Holdings and TAMURA CORP go up and down completely randomly.

Pair Corralation between SBI Holdings and TAMURA CORP

Assuming the 90 days trading horizon SBI Holdings is expected to generate 1.43 times less return on investment than TAMURA CORP. But when comparing it to its historical volatility, SBI Holdings is 1.13 times less risky than TAMURA CORP. It trades about 0.07 of its potential returns per unit of risk. TAMURA P is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  288.00  in TAMURA P on December 20, 2024 and sell it today you would earn a total of  36.00  from holding TAMURA P or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SBI Holdings  vs.  TAMURA P

SBI Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TAMURA CORP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TAMURA P are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TAMURA CORP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SBI Holdings and TAMURA CORP

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

The idea behind SBI Holdings and TAMURA P 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..