Correlation Between TMTG and REP

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

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

Diversification Opportunities for TMTG and REP

0.0

Correlation Coefficient

TMTG  REP

Pay attention - limited upside

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

Pair Corralation between TMTG and REP

If you would invest  0.07  in TMTG on January 19, 2024 and sell it today you would earn a total of  0.00  from holding TMTG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

TMTG  vs.  REP

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.

REP

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, REP may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with TMTG and REP

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

The idea behind TMTG and REP 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.