Correlation Between Energy Absolute and TPI Polene
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and TPI Polene 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 Energy Absolute and TPI Polene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and TPI Polene Public, you can compare the effects of market volatilities on Energy Absolute and TPI Polene 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 Energy Absolute with a short position of TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and TPI Polene.
Diversification Opportunities for Energy Absolute and TPI Polene
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Energy and TPI is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and TPI Polene Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and TPI Polene go up and down completely randomly.
Pair Corralation between Energy Absolute and TPI Polene
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the TPI Polene. In addition to that, Energy Absolute is 4.47 times more volatile than TPI Polene Public. It trades about -0.33 of its total potential returns per unit of risk. TPI Polene Public is currently generating about -0.31 per unit of volatility. If you would invest 108.00 in TPI Polene Public on October 20, 2024 and sell it today you would lose (7.00) from holding TPI Polene Public or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Absolute Public vs. TPI Polene Public
Performance |
| Timeline |
| Energy Absolute Public |
| TPI Polene Public |
Energy Absolute and TPI Polene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and TPI Polene
The main advantage of trading using opposite Energy Absolute and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, TPI Polene 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 Polene will offset losses from the drop in TPI Polene's long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
| TPI Polene vs. True Public | TPI Polene vs. IRPC Public | TPI Polene vs. Banpu Public | TPI Polene vs. Thai Oil Public |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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