Correlation Between TNB and Definitive

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

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

Diversification Opportunities for TNB and Definitive

-0.04

Correlation Coefficient

TNB  Definitive

Good diversification

The 3 months correlation between TNB and Definitive is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding TNB and Definitive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive and TNB 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 TNB are associated (or correlated) with Definitive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive has no effect on the direction of TNB i.e., TNB and Definitive go up and down completely randomly.

Pair Corralation between TNB and Definitive

Assuming the 90 days trading horizon TNB is expected to under-perform the Definitive. But the crypto coin apears to be less risky and, when comparing its historical volatility, TNB is 2.03 times less risky than Definitive. The crypto coin trades about -0.11 of its potential returns per unit of risk. The Definitive is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  7.04  in Definitive on July 11, 2025 and sell it today you would earn a total of  20.96  from holding Definitive or generate 297.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TNB  vs.  Definitive

TNB

Risk-Adjusted Performance

Weakest

Over the last 90 days TNB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental drivers remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for TNB shareholders.

Definitive

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Definitive are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Definitive exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TNB and Definitive

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

The idea behind TNB and Definitive 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.