Correlation Between Tiv Taam and Hamama
Can any of the company-specific risk be diversified away by investing in both Tiv Taam and Hamama 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 Tiv Taam and Hamama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiv Taam and Hamama, you can compare the effects of market volatilities on Tiv Taam and Hamama 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 Tiv Taam with a short position of Hamama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiv Taam and Hamama.
Diversification Opportunities for Tiv Taam and Hamama
Excellent diversification
The 3 months correlation between Tiv and Hamama is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tiv Taam and Hamama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamama and Tiv Taam 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 Tiv Taam are associated (or correlated) with Hamama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamama has no effect on the direction of Tiv Taam i.e., Tiv Taam and Hamama go up and down completely randomly.
Pair Corralation between Tiv Taam and Hamama
Assuming the 90 days trading horizon Tiv Taam is expected to generate 0.67 times more return on investment than Hamama. However, Tiv Taam is 1.48 times less risky than Hamama. It trades about 0.06 of its potential returns per unit of risk. Hamama is currently generating about -0.11 per unit of risk. If you would invest 62,430 in Tiv Taam on September 5, 2024 and sell it today you would earn a total of 1,250 from holding Tiv Taam or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Tiv Taam vs. Hamama
Performance |
| Timeline |
| Tiv Taam |
| Hamama |
Tiv Taam and Hamama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiv Taam and Hamama
The main advantage of trading using opposite Tiv Taam and Hamama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiv Taam position performs unexpectedly, Hamama 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 Hamama will offset losses from the drop in Hamama's long position.The idea behind Tiv Taam and Hamama pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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