Correlation Between TD Holdings and FlexShopper

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

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

Diversification Opportunities for TD Holdings and FlexShopper

-0.13

Correlation Coefficient

TD Holdings  FlexShopper

Good diversification

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

Pair Corralation between TD Holdings and FlexShopper

If you would invest  294.00  in TD Holdings on January 17, 2024 and sell it today you would earn a total of  0.00  from holding TD Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

TD Holdings  vs.  FlexShopper

TD Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TD Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, TD Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FlexShopper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FlexShopper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TD Holdings and FlexShopper

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

The idea behind TD Holdings and FlexShopper 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.