Correlation Between TCM Public and Ditto Public
Can any of the company-specific risk be diversified away by investing in both TCM Public and Ditto Public 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 TCM Public and Ditto Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TCM Public and Ditto Public, you can compare the effects of market volatilities on TCM Public and Ditto Public 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 TCM Public with a short position of Ditto Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCM Public and Ditto Public.
Diversification Opportunities for TCM Public and Ditto Public
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TCM and Ditto is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TCM Public and Ditto Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ditto Public and TCM Public 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 TCM Public are associated (or correlated) with Ditto Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ditto Public has no effect on the direction of TCM Public i.e., TCM Public and Ditto Public go up and down completely randomly.
Pair Corralation between TCM Public and Ditto Public
Assuming the 90 days trading horizon TCM Public is expected to generate 12.78 times more return on investment than Ditto Public. However, TCM Public is 12.78 times more volatile than Ditto Public. It trades about 0.04 of its potential returns per unit of risk. Ditto Public is currently generating about -0.05 per unit of risk. If you would invest 173.00 in TCM Public on August 31, 2024 and sell it today you would lose (101.00) from holding TCM Public or give up 58.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
TCM Public vs. Ditto Public
Performance |
| Timeline |
| TCM Public |
| Ditto Public |
TCM Public and Ditto Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCM Public and Ditto Public
The main advantage of trading using opposite TCM Public and Ditto Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM Public position performs unexpectedly, Ditto Public 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 Ditto Public will offset losses from the drop in Ditto Public's long position.| TCM Public vs. STPI Public | TCM Public vs. Thai Vegetable Oil | TCM Public vs. Tycoons Worldwide Group | TCM Public vs. Ratchthani Leasing Public |
| Ditto Public vs. Dohome Public | Ditto Public vs. Beryl 8 Plus | Ditto Public vs. Forth Public | Ditto Public vs. Delta Electronics Public |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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