Correlation Between TBC Bank and Aptitude Software

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

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

Diversification Opportunities for TBC Bank and Aptitude Software

0.31

Correlation Coefficient

TBC Bank  Aptitude Software

Weak diversification

The 3 months correlation between TBC and Aptitude is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Aptitude Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptitude Software and TBC Bank 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 TBC Bank Group are associated (or correlated) with Aptitude Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptitude Software has no effect on the direction of TBC Bank i.e., TBC Bank and Aptitude Software go up and down completely randomly.

Pair Corralation between TBC Bank and Aptitude Software

Assuming the 90 days trading horizon TBC Bank Group is expected to generate 0.84 times more return on investment than Aptitude Software. However, TBC Bank Group is 1.19 times less risky than Aptitude Software. It trades about 0.1 of its potential returns per unit of risk. Aptitude Software Group is currently generating about 0.02 per unit of risk. If you would invest  435,085  in TBC Bank Group on April 23, 2025 and sell it today you would earn a total of  50,915  from holding TBC Bank Group or generate 11.7% return on investment over 90 days.

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

TBC Bank Group  vs.  Aptitude Software Group

TBC Bank Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TBC Bank Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TBC Bank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Aptitude Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptitude Software Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aptitude Software is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TBC Bank and Aptitude Software

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

The idea behind TBC Bank Group and Aptitude Software Group 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.