Correlation Between Thunder Tiger and TMP Steel
Can any of the company-specific risk be diversified away by investing in both Thunder Tiger and TMP Steel 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 Thunder Tiger and TMP Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunder Tiger Corp and TMP Steel, you can compare the effects of market volatilities on Thunder Tiger and TMP Steel 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 Thunder Tiger with a short position of TMP Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Tiger and TMP Steel.
Diversification Opportunities for Thunder Tiger and TMP Steel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thunder and TMP is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Tiger Corp and TMP Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMP Steel and Thunder Tiger 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 Thunder Tiger Corp are associated (or correlated) with TMP Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMP Steel has no effect on the direction of Thunder Tiger i.e., Thunder Tiger and TMP Steel go up and down completely randomly.
Pair Corralation between Thunder Tiger and TMP Steel
Assuming the 90 days trading horizon Thunder Tiger Corp is expected to under-perform the TMP Steel. In addition to that, Thunder Tiger is 1.63 times more volatile than TMP Steel. It trades about -0.08 of its total potential returns per unit of risk. TMP Steel is currently generating about -0.04 per unit of volatility. If you would invest 3,100 in TMP Steel on September 3, 2024 and sell it today you would lose (270.00) from holding TMP Steel or give up 8.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thunder Tiger Corp vs. TMP Steel
Performance |
| Timeline |
| Thunder Tiger Corp |
| TMP Steel |
Thunder Tiger and TMP Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Tiger and TMP Steel
The main advantage of trading using opposite Thunder Tiger and TMP Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Tiger position performs unexpectedly, TMP Steel 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 TMP Steel will offset losses from the drop in TMP Steel's long position.| Thunder Tiger vs. Gloria Material Technology | Thunder Tiger vs. Ton Yi Industrial | Thunder Tiger vs. Acbel Polytech | Thunder Tiger vs. Sincere Navigation Corp |
| TMP Steel vs. Thunder Tiger Corp | TMP Steel vs. Synmosa Biopharma | TMP Steel vs. Oriental Union Chemical | TMP Steel vs. Ruentex Development Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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