Correlation Between NYSE Composite and TPG
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and TPG 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 NYSE Composite and TPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and TPG Inc, you can compare the effects of market volatilities on NYSE Composite and TPG 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 NYSE Composite with a short position of TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and TPG.
Diversification Opportunities for NYSE Composite and TPG
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and TPG is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc and NYSE Composite 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 NYSE Composite are associated (or correlated) with TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and TPG go up and down completely randomly.
Pair Corralation between NYSE Composite and TPG
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.47 times less return on investment than TPG. But when comparing it to its historical volatility, NYSE Composite is 2.85 times less risky than TPG. It trades about 0.08 of its potential returns per unit of risk. TPG Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,924 in TPG Inc on August 27, 2024 and sell it today you would earn a total of 4,142 from holding TPG Inc or generate 141.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. TPG Inc
Performance |
| Timeline |
NYSE Composite and TPG Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
TPG Inc
Pair trading matchups for TPG
Pair Trading with NYSE Composite and TPG
The main advantage of trading using opposite NYSE Composite and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, TPG 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 will offset losses from the drop in TPG's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |