Correlation Between TFS FINANCIAL and MEBUKI FINANCIAL
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL and MEBUKI FINANCIAL 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 TFS FINANCIAL and MEBUKI FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and MEBUKI FINANCIAL GROUP, you can compare the effects of market volatilities on TFS FINANCIAL and MEBUKI FINANCIAL 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 TFS FINANCIAL with a short position of MEBUKI FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and MEBUKI FINANCIAL.
Diversification Opportunities for TFS FINANCIAL and MEBUKI FINANCIAL
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TFS and MEBUKI is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL and TFS FINANCIAL 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 TFS FINANCIAL are associated (or correlated) with MEBUKI FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEBUKI FINANCIAL has no effect on the direction of TFS FINANCIAL i.e., TFS FINANCIAL and MEBUKI FINANCIAL go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and MEBUKI FINANCIAL
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 3.31 times less return on investment than MEBUKI FINANCIAL. But when comparing it to its historical volatility, TFS FINANCIAL is 1.29 times less risky than MEBUKI FINANCIAL. It trades about 0.03 of its potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 202.00 in MEBUKI FINANCIAL GROUP on September 3, 2024 and sell it today you would earn a total of 206.00 from holding MEBUKI FINANCIAL GROUP or generate 101.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFS FINANCIAL vs. MEBUKI FINANCIAL GROUP
Performance |
| Timeline |
| TFS FINANCIAL |
| MEBUKI FINANCIAL |
TFS FINANCIAL and MEBUKI FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and MEBUKI FINANCIAL
The main advantage of trading using opposite TFS FINANCIAL and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL position performs unexpectedly, MEBUKI FINANCIAL 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 MEBUKI FINANCIAL will offset losses from the drop in MEBUKI FINANCIAL's long position.| TFS FINANCIAL vs. Gladstone Investment | TFS FINANCIAL vs. Infrastrutture Wireless Italiane | TFS FINANCIAL vs. WillScot Mobile Mini | TFS FINANCIAL vs. HK Electric Investments |
| MEBUKI FINANCIAL vs. Marie Brizard Wine | MEBUKI FINANCIAL vs. Nomad Foods | MEBUKI FINANCIAL vs. TFS FINANCIAL | MEBUKI FINANCIAL vs. CDN IMPERIAL BANK |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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