Correlation Between Turning Point and TAAT Global
Can any of the company-specific risk be diversified away by investing in both Turning Point and TAAT Global 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 TAAT Global 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 TAAT Global Alternatives, you can compare the effects of market volatilities on Turning Point and TAAT Global 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 TAAT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and TAAT Global.
Diversification Opportunities for Turning Point and TAAT Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Turning and TAAT is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and TAAT Global Alternatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAAT Global Alternatives 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 TAAT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAAT Global Alternatives has no effect on the direction of Turning Point i.e., Turning Point and TAAT Global go up and down completely randomly.
Pair Corralation between Turning Point and TAAT Global
Considering the 90-day investment horizon Turning Point is expected to generate 3.93 times less return on investment than TAAT Global. But when comparing it to its historical volatility, Turning Point Brands is 10.52 times less risky than TAAT Global. It trades about 0.22 of its potential returns per unit of risk. TAAT Global Alternatives is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 25.00 in TAAT Global Alternatives on November 3, 2024 and sell it today you would lose (12.00) from holding TAAT Global Alternatives or give up 48.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. TAAT Global Alternatives
Performance |
| Timeline |
| Turning Point Brands |
| TAAT Global Alternatives |
Turning Point and TAAT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and TAAT Global
The main advantage of trading using opposite Turning Point and TAAT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, TAAT Global 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 TAAT Global will offset losses from the drop in TAAT Global's long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| TAAT Global vs. Greenlane Holdings | TAAT Global vs. Turning Point Brands | TAAT Global vs. Green Globe International | TAAT Global vs. Kaival Brands Innovations |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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