Correlation Between Tencent Music and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Tencent Music and Bridgetown Holdings 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 Tencent Music and Bridgetown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Music Entertainment and Bridgetown Holdings, you can compare the effects of market volatilities on Tencent Music and Bridgetown Holdings 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 Tencent Music with a short position of Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Music and Bridgetown Holdings.
Diversification Opportunities for Tencent Music and Bridgetown Holdings
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tencent and Bridgetown is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Music Entertainment and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings and Tencent Music 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 Tencent Music Entertainment are associated (or correlated) with Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Tencent Music i.e., Tencent Music and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Tencent Music and Bridgetown Holdings
If you would invest 1,113 in Tencent Music Entertainment on September 1, 2024 and sell it today you would earn a total of 28.00 from holding Tencent Music Entertainment or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Tencent Music Entertainment vs. Bridgetown Holdings
Performance |
| Timeline |
| Tencent Music Entert |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tencent Music and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tencent Music and Bridgetown Holdings
The main advantage of trading using opposite Tencent Music and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Music position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| Tencent Music vs. Baidu Inc | Tencent Music vs. Twilio Inc | Tencent Music vs. Spotify Technology SA | Tencent Music vs. Weibo Corp |
| Bridgetown Holdings vs. Tesla Inc | Bridgetown Holdings vs. Brunswick | Bridgetown Holdings vs. U Power Limited | Bridgetown Holdings vs. Yum Brands |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |