Correlation Between Tencent Holdings and Boson Protocol

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

Diversification Opportunities for Tencent Holdings and Boson Protocol

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Tencent and Boson is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings ADR and Boson Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boson Protocol 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 ADR are associated (or correlated) with Boson Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boson Protocol has no effect on the direction of Tencent Holdings i.e., Tencent Holdings and Boson Protocol go up and down completely randomly.

Pair Corralation between Tencent Holdings and Boson Protocol

Assuming the 90 days horizon Tencent Holdings ADR is expected to under-perform the Boson Protocol. But the otc stock apears to be less risky and, when comparing its historical volatility, Tencent Holdings ADR is 1.73 times less risky than Boson Protocol. The otc stock trades about -0.4 of its potential returns per unit of risk. The Boson Protocol is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Boson Protocol on July 3, 2022 and sell it today you would lose (3.00)  from holding Boson Protocol or give up 12.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Tencent Holdings ADR  vs.  Boson Protocol

 Performance (%) 
       Timeline  
Tencent Holdings ADR 
Tencent Performance
0 of 100
Over the last 90 days Tencent Holdings ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Tencent Price Channel

Boson Protocol 
Boson Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boson Protocol are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boson Protocol may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Boson Price Channel

Tencent Holdings and Boson Protocol Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tencent Holdings and Boson Protocol

The main advantage of trading using opposite Tencent Holdings and Boson Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Holdings position performs unexpectedly, Boson Protocol 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 Boson Protocol will offset losses from the drop in Boson Protocol's long position.
Tencent Holdings vs. Tencent Holdings
The idea behind Tencent Holdings ADR and Boson Protocol 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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