Correlation Between Pinnacle Focused and STF Tactical

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

By analyzing existing cross correlation between Pinnacle Focused Opportunities and STF Tactical Growth, you can compare the effects of market volatilities on Pinnacle Focused and STF Tactical 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 Pinnacle Focused with a short position of STF Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Focused and STF Tactical.

Diversification Opportunities for Pinnacle Focused and STF Tactical

0.92

Correlation Coefficient

Pinnacle Focused  STF Tactical

Almost no diversification

The 3 months correlation between Pinnacle and STF is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Focused Opportunities and STF Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STF Tactical Growth and Pinnacle Focused 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 Pinnacle Focused Opportunities are associated (or correlated) with STF Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STF Tactical Growth has no effect on the direction of Pinnacle Focused i.e., Pinnacle Focused and STF Tactical go up and down completely randomly.

Pair Corralation between Pinnacle Focused and STF Tactical

Given the investment horizon of 90 days Pinnacle Focused Opportunities is expected to generate 1.23 times more return on investment than STF Tactical. However, Pinnacle Focused is 1.23 times more volatile than STF Tactical Growth. It trades about 0.19 of its potential returns per unit of risk. STF Tactical Growth is currently generating about 0.07 per unit of risk. If you would invest  2,898  in Pinnacle Focused Opportunities on August 23, 2024 and sell it today you would earn a total of  496.00  from holding Pinnacle Focused Opportunities or generate 17.12% return on investment over 90 days.

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

Pinnacle Focused Opportunities  vs.  STF Tactical Growth

Pinnacle Focused Opp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pinnacle Focused Opportunities are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Pinnacle Focused unveiled solid returns over the last few months and may actually be approaching a breakup point.

STF Tactical Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in STF Tactical Growth are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, STF Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pinnacle Focused and STF Tactical

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

The idea behind Pinnacle Focused Opportunities and STF Tactical Growth 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.