Correlation Between 3i Group and Partners
Can any of the company-specific risk be diversified away by investing in both 3i Group and Partners 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 3i Group and Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3i Group plc and Partners Group, you can compare the effects of market volatilities on 3i Group and Partners 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 3i Group with a short position of Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3i Group and Partners.
Diversification Opportunities for 3i Group and Partners
Weak diversification
The 3 months correlation between TGOPF and Partners is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding 3i Group plc and Partners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Group and 3i Group 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 3i Group plc are associated (or correlated) with Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Group has no effect on the direction of 3i Group i.e., 3i Group and Partners go up and down completely randomly.
Pair Corralation between 3i Group and Partners
Assuming the 90 days horizon 3i Group plc is expected to generate 0.97 times more return on investment than Partners. However, 3i Group plc is 1.03 times less risky than Partners. It trades about 0.08 of its potential returns per unit of risk. Partners Group is currently generating about 0.05 per unit of risk. If you would invest 3,556 in 3i Group plc on November 3, 2024 and sell it today you would earn a total of 1,133 from holding 3i Group plc or generate 31.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.14% |
| Values | Daily Returns |
3i Group plc vs. Partners Group
Performance |
| Timeline |
| 3i Group plc |
| Partners Group |
3i Group and Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3i Group and Partners
The main advantage of trading using opposite 3i Group and Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3i Group position performs unexpectedly, Partners 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 Partners will offset losses from the drop in Partners' long position.| 3i Group vs. Partners Group | 3i Group vs. Burford Capital | 3i Group vs. PennantPark Investment | 3i Group vs. 3i Group PLC |
| Partners vs. 3i Group PLC | Partners vs. Ares Management LP | Partners vs. Carlyle Group | Partners vs. 3i Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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