Correlation Between TDH Holdings and Bon Natural
Can any of the company-specific risk be diversified away by investing in both TDH Holdings and Bon Natural 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 TDH Holdings and Bon Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TDH Holdings and Bon Natural Life, you can compare the effects of market volatilities on TDH Holdings and Bon Natural 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 TDH Holdings with a short position of Bon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDH Holdings and Bon Natural.
Diversification Opportunities for TDH Holdings and Bon Natural
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TDH and Bon is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding TDH Holdings and Bon Natural Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bon Natural Life and TDH 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 TDH Holdings are associated (or correlated) with Bon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bon Natural Life has no effect on the direction of TDH Holdings i.e., TDH Holdings and Bon Natural go up and down completely randomly.
Pair Corralation between TDH Holdings and Bon Natural
Given the investment horizon of 90 days TDH Holdings is expected to generate 0.77 times more return on investment than Bon Natural. However, TDH Holdings is 1.3 times less risky than Bon Natural. It trades about 0.03 of its potential returns per unit of risk. Bon Natural Life is currently generating about -0.07 per unit of risk. If you would invest 108.00 in TDH Holdings on August 27, 2024 and sell it today you would earn a total of 8.00 from holding TDH Holdings or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TDH Holdings vs. Bon Natural Life
Performance |
| Timeline |
| TDH Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bon Natural Life |
TDH Holdings and Bon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDH Holdings and Bon Natural
The main advantage of trading using opposite TDH Holdings and Bon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDH Holdings position performs unexpectedly, Bon Natural 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 Bon Natural will offset losses from the drop in Bon Natural's long position.| TDH Holdings vs. Bit Origin | TDH Holdings vs. Laird Superfood | TDH Holdings vs. Planet Green Holdings | TDH Holdings vs. Stryve Foods |
| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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