Correlation Between TMTG and Lisk

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Can any of the company-specific risk be diversified away by investing in both TMTG and Lisk 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 Lisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMTG and Lisk, you can compare the effects of market volatilities on TMTG and Lisk 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 Lisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMTG and Lisk.

Diversification Opportunities for TMTG and Lisk

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between TMTG and Lisk

Assuming the 90 days trading horizon TMTG is expected to under-perform the Lisk. In addition to that, TMTG is 1.04 times more volatile than Lisk. It trades about -0.03 of its total potential returns per unit of risk. Lisk is currently generating about 0.03 per unit of volatility. If you would invest  212.00  in Lisk on December 30, 2023 and sell it today you would lose (9.00) from holding Lisk or give up 4.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy74.46%
ValuesDaily Returns

TMTG  vs.  Lisk

 Performance 
       Timeline  
TMTG 

Risk-Adjusted Performance

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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.
Lisk 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lisk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Lisk exhibited solid returns over the last few months and may actually be approaching a breakup point.

TMTG and Lisk Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TMTG and Lisk

The main advantage of trading using opposite TMTG and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMTG position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's long position.
The idea behind TMTG and Lisk 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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