Correlation Between TFS FINANCIAL and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and WIMFARM SA EO, you can compare the effects of market volatilities on TFS FINANCIAL and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and WIMFARM SA.
Diversification Opportunities for TFS FINANCIAL and WIMFARM SA
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TFS and WIMFARM is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of TFS FINANCIAL i.e., TFS FINANCIAL and WIMFARM SA go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and WIMFARM SA
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 0.45 times more return on investment than WIMFARM SA. However, TFS FINANCIAL is 2.21 times less risky than WIMFARM SA. It trades about 0.03 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.06 per unit of risk. If you would invest 1,094 in TFS FINANCIAL on September 14, 2024 and sell it today you would earn a total of 176.00 from holding TFS FINANCIAL or generate 16.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFS FINANCIAL vs. WIMFARM SA EO
Performance |
| Timeline |
| TFS FINANCIAL |
| WIMFARM SA EO |
TFS FINANCIAL and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and WIMFARM SA
The main advantage of trading using opposite TFS FINANCIAL and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc |
| WIMFARM SA vs. AB Volvo | WIMFARM SA vs. Daimler Truck Holding | WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |