Correlation Between Corline Biomedical and TF Bank

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

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

Diversification Opportunities for Corline Biomedical and TF Bank

-0.63

Correlation Coefficient

Corline Biomedical  TF Bank

Excellent diversification

The 3 months correlation between Corline and TFBANK is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Corline Biomedical AB and TF Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TF Bank AB and Corline Biomedical 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 Corline Biomedical AB are associated (or correlated) with TF Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TF Bank AB has no effect on the direction of Corline Biomedical i.e., Corline Biomedical and TF Bank go up and down completely randomly.

Pair Corralation between Corline Biomedical and TF Bank

Assuming the 90 days trading horizon Corline Biomedical AB is expected to under-perform the TF Bank. In addition to that, Corline Biomedical is 1.8 times more volatile than TF Bank AB. It trades about -0.02 of its total potential returns per unit of risk. TF Bank AB is currently generating about 0.22 per unit of volatility. If you would invest  26,000  in TF Bank AB on September 12, 2024 and sell it today you would earn a total of  9,000  from holding TF Bank AB or generate 34.62% return on investment over 90 days.

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

Corline Biomedical AB  vs.  TF Bank AB

Corline Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corline Biomedical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Corline Biomedical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

TF Bank AB

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TF Bank AB are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, TF Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corline Biomedical and TF Bank

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

The idea behind Corline Biomedical AB and TF Bank AB 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.