Correlation Between NEM and TMTG

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Can any of the company-specific risk be diversified away by investing in both NEM and TMTG 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 NEM and TMTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEM and TMTG, you can compare the effects of market volatilities on NEM and TMTG 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 NEM with a short position of TMTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM and TMTG.

Diversification Opportunities for NEM and TMTG

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between NEM and TMTG

If you would invest  4.00  in NEM on December 29, 2023 and sell it today you would earn a total of  1.25  from holding NEM or generate 31.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

NEM  vs.  TMTG

 Performance 
       Timeline  
NEM 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NEM are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, NEM exhibited solid returns over the last few months and may actually be approaching a breakup point.
TMTG 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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.

NEM and TMTG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NEM and TMTG

The main advantage of trading using opposite NEM and TMTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM position performs unexpectedly, TMTG 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 TMTG will offset losses from the drop in TMTG's long position.
The idea behind NEM and TMTG 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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