Correlation Between TPG and Invesco Advantage
Can any of the company-specific risk be diversified away by investing in both TPG and Invesco Advantage 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 Invesco Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Inc and Invesco Advantage MIT, you can compare the effects of market volatilities on TPG and Invesco Advantage 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 Invesco Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG and Invesco Advantage.
Diversification Opportunities for TPG and Invesco Advantage
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between TPG and Invesco is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding TPG Inc and Invesco Advantage MIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Advantage MIT 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 Invesco Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Advantage MIT has no effect on the direction of TPG i.e., TPG and Invesco Advantage go up and down completely randomly.
Pair Corralation between TPG and Invesco Advantage
Considering the 90-day investment horizon TPG Inc is expected to generate 5.46 times more return on investment than Invesco Advantage. However, TPG is 5.46 times more volatile than Invesco Advantage MIT. It trades about 0.08 of its potential returns per unit of risk. Invesco Advantage MIT is currently generating about 0.16 per unit of risk. If you would invest 6,787 in TPG Inc on August 28, 2024 and sell it today you would earn a total of 342.00 from holding TPG Inc or generate 5.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TPG Inc vs. Invesco Advantage MIT
Performance |
Timeline |
TPG Inc |
Invesco Advantage MIT |
TPG and Invesco Advantage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TPG and Invesco Advantage
The main advantage of trading using opposite TPG and Invesco Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG position performs unexpectedly, Invesco Advantage 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 Invesco Advantage will offset losses from the drop in Invesco Advantage's long position.TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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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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