Correlation Between NEO and TMTG

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

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

Diversification Opportunities for NEO and TMTG

0.0

Correlation Coefficient

NEO  TMTG

Pay attention - limited upside

The 3 months correlation between NEO and TMTG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NEO and TMTG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMTG and NEO 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 NEO are associated (or correlated) with TMTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMTG has no effect on the direction of NEO i.e., NEO and TMTG go up and down completely randomly.

Pair Corralation between NEO and TMTG

If you would invest  779.00  in NEO on January 19, 2024 and sell it today you would earn a total of  931.00  from holding NEO or generate 119.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.78%
Values	Daily Returns

NEO  vs.  TMTG

NEO

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEO are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, NEO exhibited solid returns over the last few months and may actually be approaching a breakup point.

TMTG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TMTG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TMTG is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NEO and TMTG

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

The idea behind NEO and TMTG 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.