Correlation Between Prosus and Tinybeans Group
Can any of the company-specific risk be diversified away by investing in both Prosus and Tinybeans Group 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 Prosus and Tinybeans Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus and Tinybeans Group Limited, you can compare the effects of market volatilities on Prosus and Tinybeans Group 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 Prosus with a short position of Tinybeans Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus and Tinybeans Group.
Diversification Opportunities for Prosus and Tinybeans Group
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosus and Tinybeans is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Prosus and Tinybeans Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinybeans Group and Prosus 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 Prosus are associated (or correlated) with Tinybeans Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinybeans Group has no effect on the direction of Prosus i.e., Prosus and Tinybeans Group go up and down completely randomly.
Pair Corralation between Prosus and Tinybeans Group
Assuming the 90 days horizon Prosus is expected to generate 32.43 times less return on investment than Tinybeans Group. But when comparing it to its historical volatility, Prosus is 27.12 times less risky than Tinybeans Group. It trades about 0.08 of its potential returns per unit of risk. Tinybeans Group Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Tinybeans Group Limited on September 2, 2024 and sell it today you would lose (0.50) from holding Tinybeans Group Limited or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosus vs. Tinybeans Group Limited
Performance |
| Timeline |
| Prosus |
| Tinybeans Group |
Prosus and Tinybeans Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus and Tinybeans Group
The main advantage of trading using opposite Prosus and Tinybeans Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus position performs unexpectedly, Tinybeans Group 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 Tinybeans Group will offset losses from the drop in Tinybeans Group's long position.| Prosus vs. Tencent Holdings | Prosus vs. Autohome | Prosus vs. Arena Group Holdings | Prosus vs. Golden Grail Technology |
| Tinybeans Group vs. Alphabet Inc Class C | Tinybeans Group vs. Meta Platforms | Tinybeans Group vs. Tencent Holdings Ltd | Tinybeans Group vs. Prosus |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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