Correlation Between Eastern Power and TKS Technologies
Can any of the company-specific risk be diversified away by investing in both Eastern Power and TKS Technologies 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 Eastern Power and TKS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Power Group and TKS Technologies Public, you can compare the effects of market volatilities on Eastern Power and TKS Technologies 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 Eastern Power with a short position of TKS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Power and TKS Technologies.
Diversification Opportunities for Eastern Power and TKS Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and TKS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Power Group and TKS Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKS Technologies Public and Eastern Power 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 Eastern Power Group are associated (or correlated) with TKS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKS Technologies Public has no effect on the direction of Eastern Power i.e., Eastern Power and TKS Technologies go up and down completely randomly.
Pair Corralation between Eastern Power and TKS Technologies
Assuming the 90 days horizon Eastern Power Group is expected to under-perform the TKS Technologies. In addition to that, Eastern Power is 1.45 times more volatile than TKS Technologies Public. It trades about -0.36 of its total potential returns per unit of risk. TKS Technologies Public is currently generating about -0.36 per unit of volatility. If you would invest 600.00 in TKS Technologies Public on November 3, 2024 and sell it today you would lose (50.00) from holding TKS Technologies Public or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Power Group vs. TKS Technologies Public
Performance |
| Timeline |
| Eastern Power Group |
| TKS Technologies Public |
Eastern Power and TKS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Power and TKS Technologies
The main advantage of trading using opposite Eastern Power and TKS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Power position performs unexpectedly, TKS Technologies 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 TKS Technologies will offset losses from the drop in TKS Technologies' long position.| Eastern Power vs. BCPG Public | Eastern Power vs. Diamond Building Products | Eastern Power vs. Earth Tech Environment | Eastern Power vs. TPI Polene Power |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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