Correlation Between TNB and XAS
Can any of the company-specific risk be diversified away by investing in both TNB and XAS 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 XAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TNB and XAS, you can compare the effects of market volatilities on TNB and XAS 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 XAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TNB and XAS.
Diversification Opportunities for TNB and XAS
Very good diversification
The 3 months correlation between TNB and XAS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding TNB and XAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAS 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 XAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAS has no effect on the direction of TNB i.e., TNB and XAS go up and down completely randomly.
Pair Corralation between TNB and XAS
If you would invest 5.25 in XAS on January 29, 2024 and sell it today you would earn a total of 0.00 from holding XAS or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
TNB vs. XAS
Performance |
Timeline |
TNB |
XAS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TNB and XAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TNB and XAS
The main advantage of trading using opposite TNB and XAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TNB position performs unexpectedly, XAS 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 XAS will offset losses from the drop in XAS's long position.The idea behind TNB and XAS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |