Correlation Between TPG RE and New York
Can any of the company-specific risk be diversified away by investing in both TPG RE and New York 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 RE and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG RE Finance and New York Mortgage, you can compare the effects of market volatilities on TPG RE and New York 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 RE with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG RE and New York.
Diversification Opportunities for TPG RE and New York
Very poor diversification
The 3 months correlation between TPG and New is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding TPG RE Finance and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage and TPG RE 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 RE Finance are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of TPG RE i.e., TPG RE and New York go up and down completely randomly.
Pair Corralation between TPG RE and New York
Assuming the 90 days trading horizon TPG RE Finance is expected to generate 1.59 times more return on investment than New York. However, TPG RE is 1.59 times more volatile than New York Mortgage. It trades about 0.13 of its potential returns per unit of risk. New York Mortgage is currently generating about 0.12 per unit of risk. If you would invest 1,624 in TPG RE Finance on August 28, 2024 and sell it today you would earn a total of 310.00 from holding TPG RE Finance or generate 19.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG RE Finance vs. New York Mortgage
Performance |
| Timeline |
| TPG RE Finance |
| New York Mortgage |
TPG RE and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG RE and New York
The main advantage of trading using opposite TPG RE and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG RE position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| TPG RE vs. KKR Real Estate | TPG RE vs. Ready Capital | TPG RE vs. PennyMac Mortgage Investment | TPG RE vs. ACRES Commercial Realty |
| New York vs. NexPoint Real Estate | New York vs. TPG RE Finance | New York vs. New York Mortgage | New York vs. New York Mortgage |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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