Correlation Between Tfa Quantitative and Pin Oak

Can any of the company-specific risk be diversified away by investing in both Tfa Quantitative and Pin Oak 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 Tfa Quantitative and Pin Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tfa Quantitative and Pin Oak Equity, you can compare the effects of market volatilities on Tfa Quantitative and Pin Oak 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 Tfa Quantitative with a short position of Pin Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tfa Quantitative and Pin Oak.

Diversification Opportunities for Tfa Quantitative and Pin Oak

0.52

Correlation Coefficient

Tfa Quantitative  Pin Oak

Very weak diversification

The 3 months correlation between Tfa and Pin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tfa Quantitative and Pin Oak Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pin Oak Equity and Tfa Quantitative 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 Tfa Quantitative are associated (or correlated) with Pin Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pin Oak Equity has no effect on the direction of Tfa Quantitative i.e., Tfa Quantitative and Pin Oak go up and down completely randomly.

Pair Corralation between Tfa Quantitative and Pin Oak

Assuming the 90 days horizon Tfa Quantitative is expected to generate 0.7 times more return on investment than Pin Oak. However, Tfa Quantitative is 1.42 times less risky than Pin Oak. It trades about 0.04 of its potential returns per unit of risk. Pin Oak Equity is currently generating about -0.04 per unit of risk. If you would invest  1,079  in Tfa Quantitative on September 29, 2024 and sell it today you would earn a total of  58.00  from holding Tfa Quantitative or generate 5.38% return on investment over 90 days.

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

Tfa Quantitative  vs.  Pin Oak Equity

Tfa Quantitative

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tfa Quantitative are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tfa Quantitative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pin Oak Equity

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Pin Oak Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Tfa Quantitative and Pin Oak

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

The idea behind Tfa Quantitative and Pin Oak Equity 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.