Correlation Between Tencent Holdings and Tandem Diabetes
Can any of the company-specific risk be diversified away by investing in both Tencent Holdings and Tandem Diabetes 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 Tandem Diabetes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Holdings Ltd and Tandem Diabetes Care, you can compare the effects of market volatilities on Tencent Holdings and Tandem Diabetes 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 Tandem Diabetes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Holdings and Tandem Diabetes.
Diversification Opportunities for Tencent Holdings and Tandem Diabetes
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tencent and Tandem is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings Ltd and Tandem Diabetes Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandem Diabetes Care 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 Ltd are associated (or correlated) with Tandem Diabetes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandem Diabetes Care has no effect on the direction of Tencent Holdings i.e., Tencent Holdings and Tandem Diabetes go up and down completely randomly.
Pair Corralation between Tencent Holdings and Tandem Diabetes
Assuming the 90 days horizon Tencent Holdings Ltd is expected to generate 0.36 times more return on investment than Tandem Diabetes. However, Tencent Holdings Ltd is 2.81 times less risky than Tandem Diabetes. It trades about 0.15 of its potential returns per unit of risk. Tandem Diabetes Care is currently generating about -0.15 per unit of risk. If you would invest 6,613 in Tencent Holdings Ltd on June 7, 2025 and sell it today you would earn a total of 997.00 from holding Tencent Holdings Ltd or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tencent Holdings Ltd vs. Tandem Diabetes Care
Performance |
| Timeline |
| Tencent Holdings |
| Tandem Diabetes Care |
Tencent Holdings and Tandem Diabetes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tencent Holdings and Tandem Diabetes
The main advantage of trading using opposite Tencent Holdings and Tandem Diabetes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Holdings position performs unexpectedly, Tandem Diabetes 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 Tandem Diabetes will offset losses from the drop in Tandem Diabetes' long position.| Tencent Holdings vs. Auto Trader Group | Tencent Holdings vs. Weibo Corp | Tencent Holdings vs. Snap Inc | Tencent Holdings vs. Trump Media Technology |
| Tandem Diabetes vs. Insulet | Tandem Diabetes vs. DexCom Inc | Tandem Diabetes vs. Integra LifeSciences Holdings | Tandem Diabetes vs. Senseonics Holdings |
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 the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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