Correlation Between 2S Metal and Tanachira Retail

Can any of the company-specific risk be diversified away by investing in both 2S Metal and Tanachira Retail 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 2S Metal and Tanachira Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2S Metal Public and Tanachira Retail, you can compare the effects of market volatilities on 2S Metal and Tanachira Retail 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 2S Metal with a short position of Tanachira Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Tanachira Retail.

Diversification Opportunities for 2S Metal and Tanachira Retail

-0.19

Correlation Coefficient

2S Metal  Tanachira Retail

Good diversification

The 3 months correlation between 2S Metal and Tanachira is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Tanachira Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanachira Retail and 2S Metal 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 2S Metal Public are associated (or correlated) with Tanachira Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanachira Retail has no effect on the direction of 2S Metal i.e., 2S Metal and Tanachira Retail go up and down completely randomly.

Pair Corralation between 2S Metal and Tanachira Retail

Assuming the 90 days horizon 2S Metal Public is expected to generate 0.83 times more return on investment than Tanachira Retail. However, 2S Metal Public is 1.21 times less risky than Tanachira Retail. It trades about 0.22 of its potential returns per unit of risk. Tanachira Retail is currently generating about -0.09 per unit of risk. If you would invest  214.00  in 2S Metal Public on April 25, 2025 and sell it today you would earn a total of  40.00  from holding 2S Metal Public or generate 18.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

2S Metal Public  vs.  Tanachira Retail

2S Metal Public

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 2S Metal Public are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, 2S Metal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tanachira Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tanachira Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with 2S Metal and Tanachira Retail

The main advantage of trading using opposite 2S Metal and Tanachira Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Tanachira Retail 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 Tanachira Retail will offset losses from the drop in Tanachira Retail's long position.

The idea behind 2S Metal Public and Tanachira Retail 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .