Correlation Between Tubize Fin and Tessenderlo

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

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

Diversification Opportunities for Tubize Fin and Tessenderlo

0.13

Correlation Coefficient

Tubize Fin  Tessenderlo

Average diversification

The 3 months correlation between Tubize and Tessenderlo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tubize Fin and Tessenderlo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tessenderlo and Tubize Fin 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 Tubize Fin are associated (or correlated) with Tessenderlo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tessenderlo has no effect on the direction of Tubize Fin i.e., Tubize Fin and Tessenderlo go up and down completely randomly.

Pair Corralation between Tubize Fin and Tessenderlo

Assuming the 90 days trading horizon Tubize Fin is expected to generate 1.57 times more return on investment than Tessenderlo. However, Tubize Fin is 1.57 times more volatile than Tessenderlo. It trades about 0.11 of its potential returns per unit of risk. Tessenderlo is currently generating about -0.13 per unit of risk. If you would invest  12,200  in Tubize Fin on September 2, 2024 and sell it today you would earn a total of  1,580  from holding Tubize Fin or generate 12.95% return on investment over 90 days.

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

Tubize Fin  vs.  Tessenderlo

Tubize Fin

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tubize Fin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Tubize Fin reported solid returns over the last few months and may actually be approaching a breakup point.

Tessenderlo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tessenderlo has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Tubize Fin and Tessenderlo

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

The idea behind Tubize Fin and Tessenderlo 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.