Correlation Between Ameresco and TPI Composites
Can any of the company-specific risk be diversified away by investing in both Ameresco and TPI Composites 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 Ameresco and TPI Composites into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameresco and TPI Composites, you can compare the effects of market volatilities on Ameresco and TPI Composites 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 Ameresco with a short position of TPI Composites. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameresco and TPI Composites.
Diversification Opportunities for Ameresco and TPI Composites
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ameresco and TPI is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ameresco and TPI Composites in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Composites and Ameresco 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 Ameresco are associated (or correlated) with TPI Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Composites has no effect on the direction of Ameresco i.e., Ameresco and TPI Composites go up and down completely randomly.
Pair Corralation between Ameresco and TPI Composites
Given the investment horizon of 90 days Ameresco is expected to generate 0.51 times more return on investment than TPI Composites. However, Ameresco is 1.96 times less risky than TPI Composites. It trades about -0.02 of its potential returns per unit of risk. TPI Composites is currently generating about -0.01 per unit of risk. If you would invest 5,507 in Ameresco on November 2, 2024 and sell it today you would lose (3,257) from holding Ameresco or give up 59.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameresco vs. TPI Composites
Performance |
| Timeline |
| Ameresco |
| TPI Composites |
Ameresco and TPI Composites Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameresco and TPI Composites
The main advantage of trading using opposite Ameresco and TPI Composites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameresco position performs unexpectedly, TPI Composites 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 TPI Composites will offset losses from the drop in TPI Composites' long position.| Ameresco vs. TPI Composites | Ameresco vs. Hannon Armstrong Sustainable | Ameresco vs. Atkore International Group | Ameresco vs. Daqo New Energy |
| TPI Composites vs. Babcock Wilcox Enterprises | TPI Composites vs. Franklin Electric Co | TPI Composites vs. Crane Company | TPI Composites vs. Luxfer Holdings PLC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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