Correlation Between TNB and XCAD Network

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

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

Diversification Opportunities for TNB and XCAD Network

0.24

Correlation Coefficient

TNB  XCAD Network

Modest diversification

The 3 months correlation between TNB and XCAD is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TNB and XCAD Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCAD Network and TNB 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 TNB are associated (or correlated) with XCAD Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCAD Network has no effect on the direction of TNB i.e., TNB and XCAD Network go up and down completely randomly.

Pair Corralation between TNB and XCAD Network

Assuming the 90 days trading horizon TNB is expected to generate 0.55 times more return on investment than XCAD Network. However, TNB is 1.82 times less risky than XCAD Network. It trades about -0.05 of its potential returns per unit of risk. XCAD Network is currently generating about -0.37 per unit of risk. If you would invest  0.01  in TNB on January 30, 2024 and sell it today you would lose  0.00  from holding TNB or give up 3.39% of portfolio value over 90 days.

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

TNB  vs.  XCAD Network

TNB

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TNB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, TNB exhibited solid returns over the last few months and may actually be approaching a breakup point.

XCAD Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XCAD Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for XCAD Network shareholders.

Pair Trading with TNB and XCAD Network

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

The idea behind TNB and XCAD Network 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.