Correlation Between 22nd Century and TAAT Global
Can any of the company-specific risk be diversified away by investing in both 22nd Century 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 22nd Century and TAAT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 22nd Century Group and TAAT Global Alternatives, you can compare the effects of market volatilities on 22nd Century 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 22nd Century with a short position of TAAT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 22nd Century and TAAT Global.
Diversification Opportunities for 22nd Century and TAAT Global
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between 22nd and TAAT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding 22nd Century Group 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 22nd Century 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 22nd Century Group 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 22nd Century i.e., 22nd Century and TAAT Global go up and down completely randomly.
Pair Corralation between 22nd Century and TAAT Global
Given the investment horizon of 90 days 22nd Century Group is expected to generate 3.07 times more return on investment than TAAT Global. However, 22nd Century is 3.07 times more volatile than TAAT Global Alternatives. It trades about 0.05 of its potential returns per unit of risk. TAAT Global Alternatives is currently generating about 0.08 per unit of risk. If you would invest 1,889 in 22nd Century Group on November 3, 2024 and sell it today you would lose (1,478) from holding 22nd Century Group or give up 78.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
22nd Century Group vs. TAAT Global Alternatives
Performance |
| Timeline |
| 22nd Century Group |
| TAAT Global Alternatives |
22nd Century and TAAT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 22nd Century and TAAT Global
The main advantage of trading using opposite 22nd Century and TAAT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 22nd Century 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.| 22nd Century vs. Turning Point Brands | 22nd Century vs. Green Globe International | 22nd Century vs. Imperial Brands PLC | 22nd Century vs. Kaival Brands Innovations |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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