Correlation Between Angling Direct and Tinybuild

Can any of the company-specific risk be diversified away by investing in both Angling Direct and Tinybuild 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 Angling Direct and Tinybuild into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Angling Direct PLC and Tinybuild, you can compare the effects of market volatilities on Angling Direct and Tinybuild 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 Angling Direct with a short position of Tinybuild. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angling Direct and Tinybuild.

Diversification Opportunities for Angling Direct and Tinybuild

0.8

Correlation Coefficient

Angling Direct  Tinybuild

Very poor diversification

The 3 months correlation between Angling and Tinybuild is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Angling Direct PLC and Tinybuild in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinybuild and Angling Direct 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 Angling Direct PLC are associated (or correlated) with Tinybuild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinybuild has no effect on the direction of Angling Direct i.e., Angling Direct and Tinybuild go up and down completely randomly.

Pair Corralation between Angling Direct and Tinybuild

Assuming the 90 days trading horizon Angling Direct PLC is expected to generate 1.2 times more return on investment than Tinybuild. However, Angling Direct is 1.2 times more volatile than Tinybuild. It trades about 0.22 of its potential returns per unit of risk. Tinybuild is currently generating about 0.11 per unit of risk. If you would invest  3,500  in Angling Direct PLC on April 22, 2025 and sell it today you would earn a total of  1,100  from holding Angling Direct PLC or generate 31.43% return on investment over 90 days.

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

Angling Direct PLC  vs.  Tinybuild

Angling Direct PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Angling Direct PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Angling Direct exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tinybuild

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tinybuild are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tinybuild may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Angling Direct and Tinybuild

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

The idea behind Angling Direct PLC and Tinybuild 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.