Correlation Between TPG and DMY Squared
Can any of the company-specific risk be diversified away by investing in both TPG and DMY Squared 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 DMY Squared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Inc and dMY Squared Technology, you can compare the effects of market volatilities on TPG and DMY Squared 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 DMY Squared. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG and DMY Squared.
Diversification Opportunities for TPG and DMY Squared
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TPG and DMY is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TPG Inc and dMY Squared Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dMY Squared Technology 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 DMY Squared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dMY Squared Technology has no effect on the direction of TPG i.e., TPG and DMY Squared go up and down completely randomly.
Pair Corralation between TPG and DMY Squared
Considering the 90-day investment horizon TPG Inc is expected to generate 5.98 times more return on investment than DMY Squared. However, TPG is 5.98 times more volatile than dMY Squared Technology. It trades about 0.09 of its potential returns per unit of risk. dMY Squared Technology is currently generating about 0.03 per unit of risk. If you would invest 3,082 in TPG Inc on October 29, 2024 and sell it today you would earn a total of 3,583 from holding TPG Inc or generate 116.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Inc vs. dMY Squared Technology
Performance |
| Timeline |
| TPG Inc |
| dMY Squared Technology |
TPG and DMY Squared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG and DMY Squared
The main advantage of trading using opposite TPG and DMY Squared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG position performs unexpectedly, DMY Squared 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 DMY Squared will offset losses from the drop in DMY Squared's long position.| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
| DMY Squared vs. Blue Owl Capital | DMY Squared vs. TPG Inc | DMY Squared vs. Patria Investments | DMY Squared vs. Cion Investment 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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