Correlation Between TIM Participacoes and Anterix

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

By analyzing existing cross correlation between TIM Participacoes SA and Anterix, you can compare the effects of market volatilities on TIM Participacoes and Anterix 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 TIM Participacoes with a short position of Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIM Participacoes and Anterix.

Diversification Opportunities for TIM Participacoes and Anterix

0.76

Correlation Coefficient

TIM Participacoes  Anterix

Poor diversification

The 3 months correlation between TIM and Anterix is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TIM Participacoes SA and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and TIM Participacoes 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 TIM Participacoes SA are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of TIM Participacoes i.e., TIM Participacoes and Anterix go up and down completely randomly.

Pair Corralation between TIM Participacoes and Anterix

Given the investment horizon of 90 days TIM Participacoes SA is expected to under-perform the Anterix. But the stock apears to be less risky and, when comparing its historical volatility, TIM Participacoes SA is 1.78 times less risky than Anterix. The stock trades about -0.05 of its potential returns per unit of risk. The Anterix is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,271  in Anterix on August 30, 2024 and sell it today you would earn a total of  210.00  from holding Anterix or generate 6.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

TIM Participacoes SA  vs.  Anterix

TIM Participacoes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TIM Participacoes SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Anterix is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TIM Participacoes and Anterix

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

The idea behind TIM Participacoes SA and Anterix 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.