Correlation Between TPI Polene and Gunkul Engineering
Can any of the company-specific risk be diversified away by investing in both TPI Polene and Gunkul Engineering 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 Gunkul Engineering 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 Gunkul Engineering Public, you can compare the effects of market volatilities on TPI Polene and Gunkul Engineering 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 Gunkul Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI Polene and Gunkul Engineering.
Diversification Opportunities for TPI Polene and Gunkul Engineering
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TPI and Gunkul is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Power and Gunkul Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunkul Engineering Public 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 Gunkul Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunkul Engineering Public has no effect on the direction of TPI Polene i.e., TPI Polene and Gunkul Engineering go up and down completely randomly.
Pair Corralation between TPI Polene and Gunkul Engineering
Assuming the 90 days trading horizon TPI Polene Power is expected to generate 0.31 times more return on investment than Gunkul Engineering. However, TPI Polene Power is 3.25 times less risky than Gunkul Engineering. It trades about -0.22 of its potential returns per unit of risk. Gunkul Engineering Public is currently generating about -0.24 per unit of risk. If you would invest 304.00 in TPI Polene Power on September 15, 2024 and sell it today you would lose (8.00) from holding TPI Polene Power or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPI Polene Power vs. Gunkul Engineering Public
Performance |
| Timeline |
| TPI Polene Power |
| Gunkul Engineering Public |
TPI Polene and Gunkul Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPI Polene and Gunkul Engineering
The main advantage of trading using opposite TPI Polene and Gunkul Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPI Polene position performs unexpectedly, Gunkul Engineering 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 Gunkul Engineering will offset losses from the drop in Gunkul Engineering'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 |
| Gunkul Engineering vs. Tata Steel Public | Gunkul Engineering vs. TTCL Public | Gunkul Engineering vs. Thaifoods Group Public | Gunkul Engineering vs. TMT Steel 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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