Correlation Between TKS Technologies and XSpring Capital

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

By analyzing existing cross correlation between TKS Technologies Public and XSpring Capital Public, you can compare the effects of market volatilities on TKS Technologies and XSpring Capital 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 TKS Technologies with a short position of XSpring Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKS Technologies and XSpring Capital.

Diversification Opportunities for TKS Technologies and XSpring Capital

0.39

Correlation Coefficient

TKS Technologies  XSpring Capital

Weak diversification

The 3 months correlation between TKS and XSpring is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies Public and XSpring Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XSpring Capital Public and TKS Technologies 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 TKS Technologies Public are associated (or correlated) with XSpring Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XSpring Capital Public has no effect on the direction of TKS Technologies i.e., TKS Technologies and XSpring Capital go up and down completely randomly.

Pair Corralation between TKS Technologies and XSpring Capital

Assuming the 90 days trading horizon TKS Technologies Public is expected to generate 35.72 times more return on investment than XSpring Capital. However, TKS Technologies is 35.72 times more volatile than XSpring Capital Public. It trades about 0.1 of its potential returns per unit of risk. XSpring Capital Public is currently generating about 0.05 per unit of risk. If you would invest  670.00  in TKS Technologies Public on September 5, 2024 and sell it today you would lose (15.00) from holding TKS Technologies Public or give up 2.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.81%
Values	Daily Returns

TKS Technologies Public  vs.  XSpring Capital Public

TKS Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKS Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

XSpring Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TKS Technologies and XSpring Capital

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

The idea behind TKS Technologies Public and XSpring Capital Public 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.