Correlation Between TCL Electronics and Sharp

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

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

Diversification Opportunities for TCL Electronics and Sharp

-0.46

Correlation Coefficient

TCL Electronics  Sharp

Very good diversification

The 3 months correlation between TCL and Sharp is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding TCL Electronics Holdings and Sharp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharp and TCL Electronics 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 TCL Electronics Holdings are associated (or correlated) with Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharp has no effect on the direction of TCL Electronics i.e., TCL Electronics and Sharp go up and down completely randomly.

Pair Corralation between TCL Electronics and Sharp

Assuming the 90 days horizon TCL Electronics Holdings is expected to generate 9.49 times more return on investment than Sharp. However, TCL Electronics is 9.49 times more volatile than Sharp. It trades about 0.12 of its potential returns per unit of risk. Sharp is currently generating about -0.16 per unit of risk. If you would invest  100.00  in TCL Electronics Holdings on April 25, 2025 and sell it today you would earn a total of  25.00  from holding TCL Electronics Holdings or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

TCL Electronics Holdings  vs.  Sharp

TCL Electronics Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TCL Electronics Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, TCL Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Sharp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sharp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TCL Electronics and Sharp

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

The idea behind TCL Electronics Holdings and Sharp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.