Correlation Between TPG Telecom and Midway
Can any of the company-specific risk be diversified away by investing in both TPG Telecom and Midway 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 TPG Telecom and Midway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Telecom and Midway, you can compare the effects of market volatilities on TPG Telecom and Midway 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 TPG Telecom with a short position of Midway. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG Telecom and Midway.
Diversification Opportunities for TPG Telecom and Midway
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TPG and Midway is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding TPG Telecom and Midway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midway and TPG Telecom 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 TPG Telecom are associated (or correlated) with Midway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midway has no effect on the direction of TPG Telecom i.e., TPG Telecom and Midway go up and down completely randomly.
Pair Corralation between TPG Telecom and Midway
Assuming the 90 days trading horizon TPG Telecom is expected to generate 17.3 times less return on investment than Midway. But when comparing it to its historical volatility, TPG Telecom is 2.63 times less risky than Midway. It trades about 0.01 of its potential returns per unit of risk. Midway is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Midway on September 14, 2024 and sell it today you would earn a total of 37.00 from holding Midway or generate 42.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Telecom vs. Midway
Performance |
| Timeline |
| TPG Telecom |
| Midway |
TPG Telecom and Midway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG Telecom and Midway
The main advantage of trading using opposite TPG Telecom and Midway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG Telecom position performs unexpectedly, Midway 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 Midway will offset losses from the drop in Midway's long position.| TPG Telecom vs. AiMedia Technologies | TPG Telecom vs. EP Financial Group | TPG Telecom vs. MA Financial Group | TPG Telecom vs. Macquarie Bank Limited |
| Midway vs. TPG Telecom | Midway vs. Group 6 Metals | Midway vs. K2 Asset Management | Midway vs. Falcon Metals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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