Correlation Between Tenet Fintech and Global Battery

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

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

Diversification Opportunities for Tenet Fintech and Global Battery

0.13

Correlation Coefficient

Tenet Fintech  Global Battery

Average diversification

The 3 months correlation between Tenet and Global is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tenet Fintech Group and Global Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Battery Metals and Tenet Fintech 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 Tenet Fintech Group are associated (or correlated) with Global Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Battery Metals has no effect on the direction of Tenet Fintech i.e., Tenet Fintech and Global Battery go up and down completely randomly.

Pair Corralation between Tenet Fintech and Global Battery

Assuming the 90 days horizon Tenet Fintech is expected to generate 1.52 times less return on investment than Global Battery. But when comparing it to its historical volatility, Tenet Fintech Group is 1.03 times less risky than Global Battery. It trades about 0.03 of its potential returns per unit of risk. Global Battery Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.54  in Global Battery Metals on September 25, 2024 and sell it today you would lose (0.14) from holding Global Battery Metals or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Tenet Fintech Group  vs.  Global Battery Metals

Tenet Fintech Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Fintech Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Tenet Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Global Battery Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Battery Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Battery reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tenet Fintech and Global Battery

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

The idea behind Tenet Fintech Group and Global Battery Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.