Correlation Between TNB and Uquid Coin

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

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

Diversification Opportunities for TNB and Uquid Coin

-0.05

Correlation Coefficient

TNB  Uquid Coin

Good diversification

The 3 months correlation between TNB and Uquid is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding TNB and Uquid Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uquid Coin 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 Uquid Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uquid Coin has no effect on the direction of TNB i.e., TNB and Uquid Coin go up and down completely randomly.

Pair Corralation between TNB and Uquid Coin

Assuming the 90 days trading horizon TNB is expected to generate 0.34 times more return on investment than Uquid Coin. However, TNB is 2.95 times less risky than Uquid Coin. It trades about -0.14 of its potential returns per unit of risk. Uquid Coin is currently generating about -0.15 per unit of risk. If you would invest  0.01  in TNB on January 29, 2024 and sell it today you would lose  0.00  from holding TNB or give up 9.52% of portfolio value over 90 days.

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

TNB  vs.  Uquid Coin

TNB

Risk-Adjusted Performance

14 of 100

Good

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

Uquid Coin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uquid Coin 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 indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for Uquid Coin shareholders.

Pair Trading with TNB and Uquid Coin

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

The idea behind TNB and Uquid Coin 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.