Two Equities Correlation Analysis
Specify exactly 2 symbols:
TCM.CO
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for TCM and NYSE Composite
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TCM and NYSE is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding TCM Group and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and TCM 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 TCM Group are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of TCM i.e., TCM and NYSE Composite go up and down completely randomly.
Pair Corralation between TCM and NYSE Composite
Assuming the 90 days trading horizon TCM Group is expected to generate 1.23 times more return on investment than NYSE Composite. However, TCM is 1.23 times more volatile than NYSE Composite. It trades about 0.14 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.1 per unit of risk. If you would invest 4,950 in TCM Group on January 25, 2024 and sell it today you would earn a total of 110.00 from holding TCM Group or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
TCM Group vs. NYSE Composite
Performance |
| Timeline |
TCM and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
TCM Group
Pair trading matchups for TCM
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with TCM and NYSE Composite
The main advantage of trading using opposite TCM and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind TCM Group and NYSE Composite 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.| NYSE Composite vs. The Wendys Co | NYSE Composite vs. Dine Brands Global | NYSE Composite vs. BJs Restaurants | NYSE Composite vs. Rave Restaurant Group |
Check out your portfolio center.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.
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