Correlation Between Turning Point and Oak Woods
Can any of the company-specific risk be diversified away by investing in both Turning Point and Oak Woods 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 Turning Point and Oak Woods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Oak Woods Acquisition, you can compare the effects of market volatilities on Turning Point and Oak Woods 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 Turning Point with a short position of Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Oak Woods.
Diversification Opportunities for Turning Point and Oak Woods
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Turning and Oak is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition and Turning Point 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 Turning Point Brands are associated (or correlated) with Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of Turning Point i.e., Turning Point and Oak Woods go up and down completely randomly.
Pair Corralation between Turning Point and Oak Woods
Considering the 90-day investment horizon Turning Point Brands is expected to generate 7.68 times more return on investment than Oak Woods. However, Turning Point is 7.68 times more volatile than Oak Woods Acquisition. It trades about 0.25 of its potential returns per unit of risk. Oak Woods Acquisition is currently generating about -0.37 per unit of risk. If you would invest 6,045 in Turning Point Brands on November 27, 2024 and sell it today you would earn a total of 792.00 from holding Turning Point Brands or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. Oak Woods Acquisition
Performance |
| Timeline |
| Turning Point Brands |
| Oak Woods Acquisition |
Turning Point and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Oak Woods
The main advantage of trading using opposite Turning Point and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Oak Woods vs. Multi Ways Holdings | Oak Woods vs. Borr Drilling | Oak Woods vs. Global Net Lease | Oak Woods vs. Noble plc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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