Correlation Between TPK Holding and General Interface
Can any of the company-specific risk be diversified away by investing in both TPK Holding and General Interface 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 TPK Holding and General Interface into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPK Holding Co and General Interface Solution, you can compare the effects of market volatilities on TPK Holding and General Interface 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 TPK Holding with a short position of General Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPK Holding and General Interface.
Diversification Opportunities for TPK Holding and General Interface
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TPK and General is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TPK Holding Co and General Interface Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Interface and TPK Holding 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 TPK Holding Co are associated (or correlated) with General Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Interface has no effect on the direction of TPK Holding i.e., TPK Holding and General Interface go up and down completely randomly.
Pair Corralation between TPK Holding and General Interface
Assuming the 90 days trading horizon TPK Holding Co is expected to generate 1.02 times more return on investment than General Interface. However, TPK Holding is 1.02 times more volatile than General Interface Solution. It trades about -0.03 of its potential returns per unit of risk. General Interface Solution is currently generating about -0.33 per unit of risk. If you would invest 4,230 in TPK Holding Co on September 1, 2024 and sell it today you would lose (85.00) from holding TPK Holding Co or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TPK Holding Co vs. General Interface Solution
Performance |
| Timeline |
| TPK Holding |
| General Interface |
TPK Holding and General Interface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPK Holding and General Interface
The main advantage of trading using opposite TPK Holding and General Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPK Holding position performs unexpectedly, General Interface 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 General Interface will offset losses from the drop in General Interface's long position.The idea behind TPK Holding Co and General Interface Solution 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.| General Interface vs. Zhen Ding Technology | General Interface vs. TPK Holding Co | General Interface vs. Catcher Technology Co | General Interface vs. Flexium Interconnect |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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