Correlation Between TPI Polene and Country Group
Can any of the company-specific risk be diversified away by investing in both TPI Polene and Country Group 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 TPI Polene and Country Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPI Polene Power and Country Group Holdings, you can compare the effects of market volatilities on TPI Polene and Country Group 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 TPI Polene with a short position of Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI Polene and Country Group.
Diversification Opportunities for TPI Polene and Country Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TPI and Country is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Power and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings and TPI Polene 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 TPI Polene Power are associated (or correlated) with Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of TPI Polene i.e., TPI Polene and Country Group go up and down completely randomly.
Pair Corralation between TPI Polene and Country Group
Assuming the 90 days trading horizon TPI Polene Power is expected to under-perform the Country Group. But the stock apears to be less risky and, when comparing its historical volatility, TPI Polene Power is 75.56 times less risky than Country Group. The stock trades about -0.03 of its potential returns per unit of risk. The Country Group Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Country Group Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Country Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPI Polene Power vs. Country Group Holdings
Performance |
| Timeline |
| TPI Polene Power |
| Country Group Holdings |
TPI Polene and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPI Polene and Country Group
The main advantage of trading using opposite TPI Polene and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPI Polene position performs unexpectedly, Country Group 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 Country Group will offset losses from the drop in Country Group's long position.| TPI Polene vs. Ratch Group Public | TPI Polene vs. BCPG Public | TPI Polene vs. Gulf Energy Development | TPI Polene vs. BTS Group Holdings |
| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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