Correlation Between Advent Wireless and Tincorp Metals

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

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

Diversification Opportunities for Advent Wireless and Tincorp Metals

-0.24

Correlation Coefficient

Advent Wireless  Tincorp Metals

Very good diversification

The 3 months correlation between Advent and Tincorp is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless and Tincorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tincorp Metals and Advent Wireless 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 Advent Wireless are associated (or correlated) with Tincorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tincorp Metals has no effect on the direction of Advent Wireless i.e., Advent Wireless and Tincorp Metals go up and down completely randomly.

Pair Corralation between Advent Wireless and Tincorp Metals

Assuming the 90 days horizon Advent Wireless is expected to under-perform the Tincorp Metals. But the stock apears to be less risky and, when comparing its historical volatility, Advent Wireless is 1.24 times less risky than Tincorp Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Tincorp Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Tincorp Metals on April 24, 2025 and sell it today you would earn a total of  2.00  from holding Tincorp Metals or generate 13.33% return on investment over 90 days.

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

Advent Wireless  vs.  Tincorp Metals

Advent Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Tincorp Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tincorp Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tincorp Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advent Wireless and Tincorp Metals

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

The idea behind Advent Wireless and Tincorp Metals 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.