Correlation Between TKS Technologies and Eastern Power
Can any of the company-specific risk be diversified away by investing in both TKS Technologies and Eastern Power 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 TKS Technologies and Eastern Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKS Technologies Public and Eastern Power Group, you can compare the effects of market volatilities on TKS Technologies and Eastern Power 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 TKS Technologies with a short position of Eastern Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKS Technologies and Eastern Power.
Diversification Opportunities for TKS Technologies and Eastern Power
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TKS and Eastern is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies Public and Eastern Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Power Group and TKS Technologies 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 TKS Technologies Public are associated (or correlated) with Eastern Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Power Group has no effect on the direction of TKS Technologies i.e., TKS Technologies and Eastern Power go up and down completely randomly.
Pair Corralation between TKS Technologies and Eastern Power
Assuming the 90 days trading horizon TKS Technologies Public is expected to generate 24.61 times more return on investment than Eastern Power. However, TKS Technologies is 24.61 times more volatile than Eastern Power Group. It trades about 0.04 of its potential returns per unit of risk. Eastern Power Group is currently generating about -0.08 per unit of risk. If you would invest 1,122 in TKS Technologies Public on September 13, 2024 and sell it today you would lose (477.00) from holding TKS Technologies Public or give up 42.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKS Technologies Public vs. Eastern Power Group
Performance |
| Timeline |
| TKS Technologies Public |
| Eastern Power Group |
TKS Technologies and Eastern Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKS Technologies and Eastern Power
The main advantage of trading using opposite TKS Technologies and Eastern Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKS Technologies position performs unexpectedly, Eastern Power 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 Eastern Power will offset losses from the drop in Eastern Power's long position.| TKS Technologies vs. Synnex Public | TKS Technologies vs. SiS Distribution Public | TKS Technologies vs. Thoresen Thai Agencies | TKS Technologies vs. SVI Public |
| Eastern Power vs. BCPG Public | Eastern Power vs. Diamond Building Products | Eastern Power vs. Earth Tech Environment | Eastern Power vs. TPI Polene Power |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |