Correlation Between Tencent Holdings and PF Bakkafrost
Can any of the company-specific risk be diversified away by investing in both Tencent Holdings and PF Bakkafrost 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 Tencent Holdings and PF Bakkafrost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Holdings and PF Bakkafrost, you can compare the effects of market volatilities on Tencent Holdings and PF Bakkafrost 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 Tencent Holdings with a short position of PF Bakkafrost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Holdings and PF Bakkafrost.
Diversification Opportunities for Tencent Holdings and PF Bakkafrost
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tencent and 6BF is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings and PF Bakkafrost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PF Bakkafrost and Tencent Holdings 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 Tencent Holdings are associated (or correlated) with PF Bakkafrost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PF Bakkafrost has no effect on the direction of Tencent Holdings i.e., Tencent Holdings and PF Bakkafrost go up and down completely randomly.
Pair Corralation between Tencent Holdings and PF Bakkafrost
Assuming the 90 days trading horizon Tencent Holdings is expected to generate 1.22 times less return on investment than PF Bakkafrost. In addition to that, Tencent Holdings is 1.49 times more volatile than PF Bakkafrost. It trades about 0.08 of its total potential returns per unit of risk. PF Bakkafrost is currently generating about 0.14 per unit of volatility. If you would invest 4,798 in PF Bakkafrost on September 3, 2024 and sell it today you would earn a total of 777.00 from holding PF Bakkafrost or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tencent Holdings vs. PF Bakkafrost
Performance |
| Timeline |
| Tencent Holdings |
| PF Bakkafrost |
Tencent Holdings and PF Bakkafrost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tencent Holdings and PF Bakkafrost
The main advantage of trading using opposite Tencent Holdings and PF Bakkafrost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Holdings position performs unexpectedly, PF Bakkafrost 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 PF Bakkafrost will offset losses from the drop in PF Bakkafrost's long position.| Tencent Holdings vs. BYD Company Limited | Tencent Holdings vs. Alibaba Group Holdings | Tencent Holdings vs. Xiaomi | Tencent Holdings vs. Baidu Inc |
| PF Bakkafrost vs. Performance Food Group | PF Bakkafrost vs. Superior Plus Corp | PF Bakkafrost vs. NMI Holdings | PF Bakkafrost vs. Origin Agritech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |