Correlation Between Extendicare and TPG RE
Can any of the company-specific risk be diversified away by investing in both Extendicare and TPG RE 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 Extendicare and TPG RE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extendicare and TPG RE Finance, you can compare the effects of market volatilities on Extendicare and TPG RE 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 Extendicare with a short position of TPG RE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extendicare and TPG RE.
Diversification Opportunities for Extendicare and TPG RE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extendicare and TPG is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Extendicare and TPG RE Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG RE Finance and Extendicare 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 Extendicare are associated (or correlated) with TPG RE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG RE Finance has no effect on the direction of Extendicare i.e., Extendicare and TPG RE go up and down completely randomly.
Pair Corralation between Extendicare and TPG RE
If you would invest 500.00 in Extendicare on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Extendicare or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Extendicare vs. TPG RE Finance
Performance |
| Timeline |
| Extendicare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TPG RE Finance |
Extendicare and TPG RE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extendicare and TPG RE
The main advantage of trading using opposite Extendicare and TPG RE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extendicare position performs unexpectedly, TPG RE 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 TPG RE will offset losses from the drop in TPG RE's long position.| Extendicare vs. Ramsay Health Care | Extendicare vs. Jack Nathan Medical | Extendicare vs. Nova Leap Health | Extendicare vs. Fresenius SE Co |
| TPG RE vs. ACRES Commercial Realty | TPG RE vs. Dynex Capital | TPG RE vs. PennyMac Mortgage Investment | TPG RE vs. AG Mortgage Investment |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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