Correlation Between TPG and Associated Capital
Can any of the company-specific risk be diversified away by investing in both TPG and Associated Capital 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 and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Inc and Associated Capital Group, you can compare the effects of market volatilities on TPG and Associated Capital 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 with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG and Associated Capital.
Diversification Opportunities for TPG and Associated Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TPG and Associated is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding TPG Inc and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and TPG 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 Inc are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of TPG i.e., TPG and Associated Capital go up and down completely randomly.
Pair Corralation between TPG and Associated Capital
Considering the 90-day investment horizon TPG Inc is expected to generate 2.48 times more return on investment than Associated Capital. However, TPG is 2.48 times more volatile than Associated Capital Group. It trades about 0.05 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.02 per unit of risk. If you would invest 6,787 in TPG Inc on August 29, 2024 and sell it today you would earn a total of 194.00 from holding TPG Inc or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Inc vs. Associated Capital Group
Performance |
| Timeline |
| TPG Inc |
| Associated Capital |
TPG and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG and Associated Capital
The main advantage of trading using opposite TPG and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
| Associated Capital vs. TPG Inc | Associated Capital vs. Carlyle Secured Lending | Associated Capital vs. Brookfield 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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