Correlation Between AUSTEVOLL SEAFOOD and Tencent Holdings
Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD and Tencent 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 AUSTEVOLL SEAFOOD and Tencent Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and Tencent Holdings Ltd, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD and Tencent 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 AUSTEVOLL SEAFOOD with a short position of Tencent Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and Tencent Holdings.
Diversification Opportunities for AUSTEVOLL SEAFOOD and Tencent Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUSTEVOLL and Tencent is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD and Tencent Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Holdings and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD are associated (or correlated) with Tencent Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Holdings has no effect on the direction of AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and Tencent Holdings go up and down completely randomly.
Pair Corralation between AUSTEVOLL SEAFOOD and Tencent Holdings
Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 0.57 times more return on investment than Tencent Holdings. However, AUSTEVOLL SEAFOOD is 1.75 times less risky than Tencent Holdings. It trades about 0.25 of its potential returns per unit of risk. Tencent Holdings Ltd is currently generating about -0.18 per unit of risk. If you would invest 809.00 in AUSTEVOLL SEAFOOD on October 21, 2024 and sell it today you would earn a total of 61.00 from holding AUSTEVOLL SEAFOOD or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUSTEVOLL SEAFOOD vs. Tencent Holdings Ltd
Performance |
| Timeline |
| AUSTEVOLL SEAFOOD |
| Tencent Holdings |
AUSTEVOLL SEAFOOD and Tencent Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSTEVOLL SEAFOOD and Tencent Holdings
The main advantage of trading using opposite AUSTEVOLL SEAFOOD and Tencent Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD position performs unexpectedly, Tencent 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 Tencent Holdings will offset losses from the drop in Tencent Holdings' long position.| AUSTEVOLL SEAFOOD vs. ALBIS LEASING AG | AUSTEVOLL SEAFOOD vs. BioNTech SE | AUSTEVOLL SEAFOOD vs. AAC TECHNOLOGHLDGADR | AUSTEVOLL SEAFOOD vs. Sunny Optical Technology |
| Tencent Holdings vs. Alphabet Class A | Tencent Holdings vs. Alphabet Class A | Tencent Holdings vs. Alphabet | Tencent Holdings vs. Meta Platforms |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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