Correlation Between TFS FINANCIAL and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL and Nine Dragons 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 Nine Dragons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and Nine Dragons Paper, you can compare the effects of market volatilities on TFS FINANCIAL and Nine Dragons 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 Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and Nine Dragons.
Diversification Opportunities for TFS FINANCIAL and Nine Dragons
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TFS and Nine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper 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 Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of TFS FINANCIAL i.e., TFS FINANCIAL and Nine Dragons go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and Nine Dragons
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 0.55 times more return on investment than Nine Dragons. However, TFS FINANCIAL is 1.82 times less risky than Nine Dragons. It trades about 0.19 of its potential returns per unit of risk. Nine Dragons Paper is currently generating about -0.13 per unit of risk. If you would invest 1,140 in TFS FINANCIAL on August 30, 2024 and sell it today you would earn a total of 210.00 from holding TFS FINANCIAL or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
TFS FINANCIAL vs. Nine Dragons Paper
Performance |
| Timeline |
| TFS FINANCIAL |
| Nine Dragons Paper |
TFS FINANCIAL and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and Nine Dragons
The main advantage of trading using opposite TFS FINANCIAL and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.| TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Superior Plus Corp | TFS FINANCIAL vs. SIVERS SEMICONDUCTORS AB |
| Nine Dragons vs. TFS FINANCIAL | Nine Dragons vs. Webster Financial | Nine Dragons vs. STORE ELECTRONIC | Nine Dragons vs. STMicroelectronics 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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