Correlation Between Tat Techno and Ladenburg Thalmann

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Can any of the company-specific risk be diversified away by investing in both Tat Techno and Ladenburg Thalmann 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 Tat Techno and Ladenburg Thalmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tat Techno and Ladenburg Thalmann Financial, you can compare the effects of market volatilities on Tat Techno and Ladenburg Thalmann 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 Tat Techno with a short position of Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and Ladenburg Thalmann.

Diversification Opportunities for Tat Techno and Ladenburg Thalmann

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Tat and Ladenburg is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann and Tat Techno 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 Tat Techno are associated (or correlated) with Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of Tat Techno i.e., Tat Techno and Ladenburg Thalmann go up and down completely randomly.

Pair Corralation between Tat Techno and Ladenburg Thalmann

If you would invest  1,663  in Tat Techno on November 2, 2024 and sell it today you would earn a total of  1,430  from holding Tat Techno or generate 85.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy0.97%
ValuesDaily Returns

Tat Techno  vs.  Ladenburg Thalmann Financial

 Performance 
       Timeline  
Tat Techno 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Tat Techno are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Tat Techno unveiled solid returns over the last few months and may actually be approaching a breakup point.
Ladenburg Thalmann 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tat Techno and Ladenburg Thalmann Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tat Techno and Ladenburg Thalmann

The main advantage of trading using opposite Tat Techno and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno position performs unexpectedly, Ladenburg Thalmann 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 Ladenburg Thalmann will offset losses from the drop in Ladenburg Thalmann's long position.
The idea behind Tat Techno and Ladenburg Thalmann Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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