Correlation Between Teka Construction and SC Asset

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

By analyzing existing cross correlation between Teka Construction PCL and SC Asset, you can compare the effects of market volatilities on Teka Construction and SC Asset 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 Teka Construction with a short position of SC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teka Construction and SC Asset.

Diversification Opportunities for Teka Construction and SC Asset

0.69

Correlation Coefficient

Teka Construction  SC Asset

Poor diversification

The 3 months correlation between Teka and SC Asset is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Teka Construction PCL and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset and Teka Construction 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 Teka Construction PCL are associated (or correlated) with SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of Teka Construction i.e., Teka Construction and SC Asset go up and down completely randomly.

Pair Corralation between Teka Construction and SC Asset

Assuming the 90 days trading horizon Teka Construction PCL is expected to under-perform the SC Asset. In addition to that, Teka Construction is 1.05 times more volatile than SC Asset. It trades about -0.05 of its total potential returns per unit of risk. SC Asset is currently generating about -0.01 per unit of volatility. If you would invest  288.00  in SC Asset on September 14, 2024 and sell it today you would lose (6.00) from holding SC Asset or give up 2.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Teka Construction PCL  vs.  SC Asset

Teka Construction PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teka Construction PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Teka Construction is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

SC Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SC Asset has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, SC Asset is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Teka Construction and SC Asset

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

The idea behind Teka Construction PCL and SC Asset 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.