Correlation Between TSOGO SUN and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both TSOGO SUN and KINGBOARD CHEMICAL 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 TSOGO SUN and KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSOGO SUN GAMING and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on TSOGO SUN and KINGBOARD CHEMICAL 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 TSOGO SUN with a short position of KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSOGO SUN and KINGBOARD CHEMICAL.
Diversification Opportunities for TSOGO SUN and KINGBOARD CHEMICAL
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TSOGO and KINGBOARD is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding TSOGO SUN GAMING and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL and TSOGO SUN 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 TSOGO SUN GAMING are associated (or correlated) with KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of TSOGO SUN i.e., TSOGO SUN and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between TSOGO SUN and KINGBOARD CHEMICAL
Assuming the 90 days horizon TSOGO SUN GAMING is expected to generate 1.61 times more return on investment than KINGBOARD CHEMICAL. However, TSOGO SUN is 1.61 times more volatile than KINGBOARD CHEMICAL. It trades about 0.06 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.04 per unit of risk. If you would invest 17.00 in TSOGO SUN GAMING on September 3, 2024 and sell it today you would earn a total of 37.00 from holding TSOGO SUN GAMING or generate 217.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TSOGO SUN GAMING vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| TSOGO SUN GAMING |
| KINGBOARD CHEMICAL |
TSOGO SUN and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSOGO SUN and KINGBOARD CHEMICAL
The main advantage of trading using opposite TSOGO SUN and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSOGO SUN position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| TSOGO SUN vs. Las Vegas Sands | TSOGO SUN vs. ENTAIN PLC UNSPADR1 | TSOGO SUN vs. GENTING SG LTD | TSOGO SUN vs. Boyd Gaming |
| KINGBOARD CHEMICAL vs. TOTAL GABON | KINGBOARD CHEMICAL vs. Walgreens Boots Alliance | KINGBOARD CHEMICAL vs. Peak Resources Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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