Correlation Between TGI Solar and VivoPower International
Can any of the company-specific risk be diversified away by investing in both TGI Solar and VivoPower International 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 TGI Solar and VivoPower International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TGI Solar Power and VivoPower International PLC, you can compare the effects of market volatilities on TGI Solar and VivoPower International 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 TGI Solar with a short position of VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGI Solar and VivoPower International.
Diversification Opportunities for TGI Solar and VivoPower International
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TGI and VivoPower is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding TGI Solar Power and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and TGI Solar 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 TGI Solar Power are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of TGI Solar i.e., TGI Solar and VivoPower International go up and down completely randomly.
Pair Corralation between TGI Solar and VivoPower International
Given the investment horizon of 90 days TGI Solar Power is expected to under-perform the VivoPower International. But the pink sheet apears to be less risky and, when comparing its historical volatility, TGI Solar Power is 1.34 times less risky than VivoPower International. The pink sheet trades about 0.0 of its potential returns per unit of risk. The VivoPower International PLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 82.00 in VivoPower International PLC on September 1, 2024 and sell it today you would earn a total of 36.00 from holding VivoPower International PLC or generate 43.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TGI Solar Power vs. VivoPower International PLC
Performance |
| Timeline |
| TGI Solar Power |
| VivoPower International |
TGI Solar and VivoPower International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TGI Solar and VivoPower International
The main advantage of trading using opposite TGI Solar and VivoPower International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGI Solar position performs unexpectedly, VivoPower International 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 VivoPower International will offset losses from the drop in VivoPower International's long position.| TGI Solar vs. Ascent Solar Technologies, | TGI Solar vs. SinglePoint | TGI Solar vs. SunHydrogen | TGI Solar vs. Sunrun Inc |
| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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