Correlation Between Tipco Foods and GFPT Public
Can any of the company-specific risk be diversified away by investing in both Tipco Foods and GFPT Public 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 Tipco Foods and GFPT Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tipco Foods Public and GFPT Public, you can compare the effects of market volatilities on Tipco Foods and GFPT Public 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 Tipco Foods with a short position of GFPT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tipco Foods and GFPT Public.
Diversification Opportunities for Tipco Foods and GFPT Public
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tipco and GFPT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tipco Foods Public and GFPT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFPT Public and Tipco Foods 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 Tipco Foods Public are associated (or correlated) with GFPT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFPT Public has no effect on the direction of Tipco Foods i.e., Tipco Foods and GFPT Public go up and down completely randomly.
Pair Corralation between Tipco Foods and GFPT Public
Assuming the 90 days trading horizon Tipco Foods Public is expected to generate 57.12 times more return on investment than GFPT Public. However, Tipco Foods is 57.12 times more volatile than GFPT Public. It trades about 0.08 of its potential returns per unit of risk. GFPT Public is currently generating about -0.05 per unit of risk. If you would invest 995.00 in Tipco Foods Public on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Tipco Foods Public or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tipco Foods Public vs. GFPT Public
Performance |
| Timeline |
| Tipco Foods Public |
| GFPT Public |
Tipco Foods and GFPT Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tipco Foods and GFPT Public
The main advantage of trading using opposite Tipco Foods and GFPT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tipco Foods position performs unexpectedly, GFPT Public 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 GFPT Public will offset losses from the drop in GFPT Public's long position.| Tipco Foods vs. Tipco Asphalt Public | Tipco Foods vs. Thai Vegetable Oil | Tipco Foods vs. Thai Union Group | Tipco Foods vs. TISCO Financial Group |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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