Correlation Between Bank Central and TG Venture
Can any of the company-specific risk be diversified away by investing in both Bank Central and TG Venture 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 Bank Central and TG Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and TG Venture Acquisition, you can compare the effects of market volatilities on Bank Central and TG Venture 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 Bank Central with a short position of TG Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and TG Venture.
Diversification Opportunities for Bank Central and TG Venture
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and TGVCW is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and TG Venture Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TG Venture Acquisition and Bank Central 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 Bank Central Asia are associated (or correlated) with TG Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TG Venture Acquisition has no effect on the direction of Bank Central i.e., Bank Central and TG Venture go up and down completely randomly.
Pair Corralation between Bank Central and TG Venture
Assuming the 90 days horizon Bank Central Asia is expected to generate 0.22 times more return on investment than TG Venture. However, Bank Central Asia is 4.47 times less risky than TG Venture. It trades about 0.03 of its potential returns per unit of risk. TG Venture Acquisition is currently generating about -0.11 per unit of risk. If you would invest 1,309 in Bank Central Asia on October 7, 2024 and sell it today you would earn a total of 201.00 from holding Bank Central Asia or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 25.81% |
| Values | Daily Returns |
Bank Central Asia vs. TG Venture Acquisition
Performance |
| Timeline |
| Bank Central Asia |
| TG Venture Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and TG Venture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and TG Venture
The main advantage of trading using opposite Bank Central and TG Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, TG Venture 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 TG Venture will offset losses from the drop in TG Venture's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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