Correlation Between TMTG and True USD

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

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

Diversification Opportunities for TMTG and True USD

0.0

Correlation Coefficient

TMTG  True USD

Pay attention - limited upside

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

Pair Corralation between TMTG and True USD

If you would invest  99.00  in True USD on January 26, 2024 and sell it today you would earn a total of  1.00  from holding True USD or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

TMTG  vs.  True USD

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.

True USD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in True USD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, True USD is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TMTG and True USD

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

The idea behind TMTG and True USD 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.