Correlation Between TPG Telecom and Pro Medicus
Can any of the company-specific risk be diversified away by investing in both TPG Telecom and Pro Medicus 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 Pro Medicus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Telecom and Pro Medicus, you can compare the effects of market volatilities on TPG Telecom and Pro Medicus 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 Pro Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG Telecom and Pro Medicus.
Diversification Opportunities for TPG Telecom and Pro Medicus
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TPG and Pro is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding TPG Telecom and Pro Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Medicus 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 Pro Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Medicus has no effect on the direction of TPG Telecom i.e., TPG Telecom and Pro Medicus go up and down completely randomly.
Pair Corralation between TPG Telecom and Pro Medicus
Assuming the 90 days trading horizon TPG Telecom is expected to under-perform the Pro Medicus. But the stock apears to be less risky and, when comparing its historical volatility, TPG Telecom is 1.78 times less risky than Pro Medicus. The stock trades about -0.01 of its potential returns per unit of risk. The Pro Medicus is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 19,483 in Pro Medicus on September 1, 2024 and sell it today you would earn a total of 5,706 from holding Pro Medicus or generate 29.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TPG Telecom vs. Pro Medicus
Performance |
| Timeline |
| TPG Telecom |
| Pro Medicus |
TPG Telecom and Pro Medicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG Telecom and Pro Medicus
The main advantage of trading using opposite TPG Telecom and Pro Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG Telecom position performs unexpectedly, Pro Medicus 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 Pro Medicus will offset losses from the drop in Pro Medicus' long position.| TPG Telecom vs. ACDC Metals | TPG Telecom vs. Alternative Investment Trust | TPG Telecom vs. MFF Capital Investments | TPG Telecom vs. Flagship Investments |
| Pro Medicus vs. Hutchison Telecommunications | Pro Medicus vs. Health and Plant | Pro Medicus vs. TPG Telecom | Pro Medicus vs. Ramsay Health Care |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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