Correlation Between TMTG and LEND
Can any of the company-specific risk be diversified away by investing in both TMTG and LEND 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 TMTG and LEND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMTG and LEND, you can compare the effects of market volatilities on TMTG and LEND 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 TMTG with a short position of LEND. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMTG and LEND.
Diversification Opportunities for TMTG and LEND
Pay attention - limited upside
The 3 months correlation between TMTG and LEND is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TMTG and LEND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEND and TMTG 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 TMTG are associated (or correlated) with LEND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEND has no effect on the direction of TMTG i.e., TMTG and LEND go up and down completely randomly.
Pair Corralation between TMTG and LEND
If you would invest 0.00 in LEND on January 27, 2024 and sell it today you would earn a total of 127.00 from holding LEND or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 4.35% |
Values | Daily Returns |
TMTG vs. LEND
Performance |
Timeline |
TMTG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LEND |
TMTG and LEND Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TMTG and LEND
The main advantage of trading using opposite TMTG and LEND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMTG position performs unexpectedly, LEND 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 LEND will offset losses from the drop in LEND's long position.The idea behind TMTG and LEND 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.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |