Correlation Between Tencent Holdings and Tencent Holdings

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Can any of the company-specific risk be diversified away by investing in both Tencent Holdings and Tencent Holdings 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 Tencent Holdings and Tencent Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Holdings and Tencent Holdings, you can compare the effects of market volatilities on Tencent Holdings and Tencent Holdings 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 Tencent Holdings with a short position of Tencent Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Holdings and Tencent Holdings.

Diversification Opportunities for Tencent Holdings and Tencent Holdings

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between Tencent and Tencent is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings and Tencent Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Holdings and Tencent 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 Tencent Holdings are associated (or correlated) with Tencent Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Holdings has no effect on the direction of Tencent Holdings i.e., Tencent Holdings and Tencent Holdings go up and down completely randomly.

Pair Corralation between Tencent Holdings and Tencent Holdings

Assuming the 90 days horizon Tencent Holdings is expected to generate 0.95 times more return on investment than Tencent Holdings. However, Tencent Holdings is 1.05 times less risky than Tencent Holdings. It trades about 0.0 of its potential returns per unit of risk. Tencent Holdings is currently generating about 0.0 per unit of risk. If you would invest  3,954  in Tencent Holdings on September 4, 2022 and sell it today you would lose (168.00)  from holding Tencent Holdings or give up 4.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Tencent Holdings  vs.  Tencent Holdings Ltd

 Performance (%) 
       Timeline  
Tencent Holdings 
Tencent Performance
0 of 100
Over the last 90 days Tencent Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Tencent Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Tencent Price Channel

Tencent Holdings 
Tencent Performance
0 of 100
Over the last 90 days Tencent Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Tencent Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tencent Price Channel

Tencent Holdings and Tencent Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tencent Holdings and Tencent Holdings

The main advantage of trading using opposite Tencent Holdings and Tencent Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Holdings position performs unexpectedly, Tencent Holdings 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 Tencent Holdings will offset losses from the drop in Tencent Holdings' long position.
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The idea behind Tencent Holdings and Tencent Holdings 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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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 CEO Directory module to screen CEOs from public companies around the world.

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