Correlation Between Takung Art and Newegg Commerce

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

By analyzing existing cross correlation between Takung Art Co and Newegg Commerce, you can compare the effects of market volatilities on Takung Art and Newegg Commerce 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 Takung Art with a short position of Newegg Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Takung Art and Newegg Commerce.

Diversification Opportunities for Takung Art and Newegg Commerce

0.89

Correlation Coefficient

Takung Art  Newegg Commerce

Very poor diversification

The 3 months correlation between Takung and Newegg is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Takung Art Co and Newegg Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newegg Commerce and Takung Art 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 Takung Art Co are associated (or correlated) with Newegg Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newegg Commerce has no effect on the direction of Takung Art i.e., Takung Art and Newegg Commerce go up and down completely randomly.

Pair Corralation between Takung Art and Newegg Commerce

If you would invest  23.00  in Takung Art Co on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Takung Art Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	0.79%
Values	Daily Returns

Takung Art Co  vs.  Newegg Commerce

Takung Art

Risk-Adjusted Performance

0 of 100

Very Weak

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

Newegg Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newegg Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Takung Art and Newegg Commerce

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

The idea behind Takung Art Co and Newegg Commerce 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.