Correlation Between SALMAR and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both SALMAR and TFS FINANCIAL 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 SALMAR and TFS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SALMAR and TFS FINANCIAL, you can compare the effects of market volatilities on SALMAR and TFS FINANCIAL 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 SALMAR with a short position of TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALMAR and TFS FINANCIAL.
Diversification Opportunities for SALMAR and TFS FINANCIAL
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SALMAR and TFS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SALMAR and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL and SALMAR 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 SALMAR are associated (or correlated) with TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of SALMAR i.e., SALMAR and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between SALMAR and TFS FINANCIAL
Assuming the 90 days trading horizon SALMAR is expected to under-perform the TFS FINANCIAL. But the stock apears to be less risky and, when comparing its historical volatility, SALMAR is 1.31 times less risky than TFS FINANCIAL. The stock trades about -0.03 of its potential returns per unit of risk. The TFS FINANCIAL is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,200 in TFS FINANCIAL on August 30, 2024 and sell it today you would earn a total of 150.00 from holding TFS FINANCIAL or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALMAR vs. TFS FINANCIAL
Performance |
| Timeline |
| SALMAR |
| TFS FINANCIAL |
SALMAR and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALMAR and TFS FINANCIAL
The main advantage of trading using opposite SALMAR and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALMAR position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| SALMAR vs. UNIVMUSIC GRPADR050 | SALMAR vs. Cellnex Telecom SA | SALMAR vs. MOVIE GAMES SA | SALMAR vs. Zoom Video Communications |
| TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Superior Plus Corp | TFS FINANCIAL vs. SIVERS SEMICONDUCTORS AB |
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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