Correlation Between Nasdaq and Teb Bancorp
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Teb Bancorp 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 Nasdaq and Teb Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Teb Bancorp, you can compare the effects of market volatilities on Nasdaq and Teb Bancorp 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 Nasdaq with a short position of Teb Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Teb Bancorp.
Diversification Opportunities for Nasdaq and Teb Bancorp
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nasdaq and Teb is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Teb Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teb Bancorp and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Teb Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teb Bancorp has no effect on the direction of Nasdaq i.e., Nasdaq and Teb Bancorp go up and down completely randomly.
Pair Corralation between Nasdaq and Teb Bancorp
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.23 times more return on investment than Teb Bancorp. However, Nasdaq Inc is 4.37 times less risky than Teb Bancorp. It trades about 0.18 of its potential returns per unit of risk. Teb Bancorp is currently generating about 0.03 per unit of risk. If you would invest 5,939 in Nasdaq Inc on September 24, 2024 and sell it today you would earn a total of 1,831 from holding Nasdaq Inc or generate 30.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nasdaq Inc vs. Teb Bancorp
Performance |
| Timeline |
| Nasdaq Inc |
| Teb Bancorp |
Nasdaq and Teb Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Teb Bancorp
The main advantage of trading using opposite Nasdaq and Teb Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Teb Bancorp 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 Teb Bancorp will offset losses from the drop in Teb Bancorp's long position.The idea behind Nasdaq Inc and Teb Bancorp 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.| Teb Bancorp vs. Banco Bradesco SA | Teb Bancorp vs. Itau Unibanco Banco | Teb Bancorp vs. Lloyds Banking Group | Teb Bancorp vs. Deutsche Bank AG |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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