Correlation Between TPG and Pinterest
Can any of the company-specific risk be diversified away by investing in both TPG and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Inc and Pinterest, you can compare the effects of market volatilities on TPG and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG and Pinterest.
Diversification Opportunities for TPG and Pinterest
Modest diversification
The 3 months correlation between TPG and Pinterest is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TPG Inc and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of TPG i.e., TPG and Pinterest go up and down completely randomly.
Pair Corralation between TPG and Pinterest
Considering the 90-day investment horizon TPG Inc is expected to generate 0.77 times more return on investment than Pinterest. However, TPG Inc is 1.3 times less risky than Pinterest. It trades about 0.1 of its potential returns per unit of risk. Pinterest is currently generating about -0.02 per unit of risk. If you would invest 4,166 in TPG Inc on November 3, 2024 and sell it today you would earn a total of 2,559 from holding TPG Inc or generate 61.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Inc vs. Pinterest
Performance |
| Timeline |
| TPG Inc |
TPG and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG and Pinterest
The main advantage of trading using opposite TPG and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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