Correlation Between TBC Bank and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both TBC Bank and Gamma Communications 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 TBC Bank and Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TBC Bank Group and Gamma Communications PLC, you can compare the effects of market volatilities on TBC Bank and Gamma Communications 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 TBC Bank with a short position of Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Gamma Communications.
Diversification Opportunities for TBC Bank and Gamma Communications
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TBC and Gamma is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC and TBC Bank 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 TBC Bank Group are associated (or correlated) with Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of TBC Bank i.e., TBC Bank and Gamma Communications go up and down completely randomly.
Pair Corralation between TBC Bank and Gamma Communications
Assuming the 90 days trading horizon TBC Bank Group is expected to generate 1.17 times more return on investment than Gamma Communications. However, TBC Bank is 1.17 times more volatile than Gamma Communications PLC. It trades about -0.13 of its potential returns per unit of risk. Gamma Communications PLC is currently generating about -0.57 per unit of risk. If you would invest 313,500 in TBC Bank Group on October 13, 2024 and sell it today you would lose (11,000) from holding TBC Bank Group or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TBC Bank Group vs. Gamma Communications PLC
Performance |
| Timeline |
| TBC Bank Group |
| Gamma Communications PLC |
TBC Bank and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TBC Bank and Gamma Communications
The main advantage of trading using opposite TBC Bank and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBC Bank position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| TBC Bank vs. Chocoladefabriken Lindt Spruengli | TBC Bank vs. Rockwood Realisation PLC | TBC Bank vs. Toyota Motor Corp | TBC Bank vs. Johnson Matthey PLC |
| Gamma Communications vs. Tetragon Financial Group | Gamma Communications vs. Sydbank | Gamma Communications vs. Ameriprise Financial | Gamma Communications vs. TBC Bank Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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